After a 55% surge in a month, are Ola Electric shares still a buy or is it time to take profits? – News Air Insight

Shares of Ola Electric have been on a strong upward trajectory, gaining 40.6% in the last two weeks and 55% over the past month, as investors cheered the company’s inclusion under the government’s Production Linked Incentive (PLI) scheme and improving technical momentum.

The sharp rebound has also been supported by strong volumes, making the stock one of the best-performing new-age counters in recent weeks.

The Automotive Research Association of India (ARAI) recently approved Ola under the Ministry of Heavy Industries’ PLI scheme for its Gen 3 S1 scooters. This certification makes the company eligible for incentives ranging from 13% to 18% of sales value until 2028. Importantly, the approval covers all seven models of Ola’s Gen 3 S1 scooters, which together account for more than half of its current sales.

Management described the certification as a structural milestone, one that will directly strengthen cost structures and margins, helping the company move closer to achieving profitability.

Commenting on the stock’s recent surge, Ajit Mishra, SVP-Research at Religare Broking, said: “Ola Electric has staged a sharp comeback, rallying over 40% in just two weeks and 55% in a month, backed by strong volumes and a breakout from its downtrend. The stock is now approaching a key resistance zone at Rs 65–68, and a decisive close above this could fuel a medium-term move toward Rs 80–90.”

“On the downside, Rs 54–58 offers immediate support, with Rs 50 as a crucial base. While some near-term profit-taking or consolidation is possible, the broader setup indicates scope for further upside if momentum sustains,” he added.Earlier, analysts had also flagged a positive technical setup. Mandar Bhojane, senior technical and derivative analyst at Choice Broking, observed that Ola Electric “has confirmed a breakout and retest of its falling channel… The price structure is constructive with a series of higher highs and higher lows, supported by strong volumes.”He suggested that dips toward Rs 52–50 should be seen as healthy corrections and potential buying zones, while a move above Rs 57 could open the way to Rs 62 and Rs 70.

Drumil Vithlani, technical research analyst at Bonanza, had pointed to resistance at Rs 55–58 and support at Rs 50, noting that the RSI near 68 indicated the stock was in overbought territory, raising the likelihood of a short-term pullback before another move higher.

Meanwhile, Anirudh Garg, partner and fund manager at INVasset PMS, highlighted that Ola had “broken out of a year-long downtrend with strong volumes, marking an important technical shift.” He pegged support at Rs 50–52 and resistance at Rs 58–62, with potential upside to Rs 68–70 on a decisive close above.

Despite these gains, the company’s fundamentals remain under scrutiny. Ola reported a net loss of Rs 428 crore in the June quarter, wider than a year ago, even as revenue halved year-on-year to Rs 828 crore.

However, gross margins improved to 25.6%, and management has emphasized that the PLI certification provides a crucial cushion to its cost structure, enabling more sustainable growth. The company has also received shareholder approval to reallocate IPO proceeds and extend deployment timelines, with a focus on capital discipline and risk management.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)