Ola Electric to reduce physical stores to 550 by end of March, per media report; Stock in focus

Shares of Ola Electric Mobility Ltd. are in focus after an ET report, citing sources, stated that the company plans to reduce its physical stores to 550 by the end of March.This comes just over a year after the company electric vehicle-maker had expanded its network by four-fold to 4,000 stores across India. As of December 2, 2024, it had 800 company-owned stores across the country.

Ola Electric CEO Bhavish Aggarwal had announced a target of expanding the network by over four times and have 4,000 stores in India with just 19 days from early December. On December 25, the company reported that it had opened over 3,200 new stores, each co-located with service centres.
On another note, earlier this week, brokerage firm Citi cut its rating on Ola Electric to ‘sell’ from ‘buy’ and also slashed its target price by 51% to 27 from the previous 55.Citi cited slower-than-expected EV penetration in India’s two-wheeler segment, citing GST cuts on internal combustion engine vehicles have narrowed the gap in prices and slowed electrification.

The analyst also flagged market share losses, driven by service-related challenges, intense competition and weak customer perception. Ola Electric’s third quarter performance was below estimates due to negative operating leverage.A day later, the Bombay High Court at Goa stayed an arrest warrant issued against the company’s CEO Bhavish Aggarwal by the District Consumer Commission of South Goa.

The warrant was issued after the company’s CEO failed to appear before the commission despite being served notice.

Pritesh Chandrakant Ghadi had filed a complaint over issues with an Ola S1 Pro Second Gen scooter that allegedly persisted even post repairs. The complainant had sought a refund of 1.47 lakh with 50,000 for harassment and mental agony.

Ola Electric shares ended the previous session 2.55% lower at 27.49 apiece. The stock has declined 15.6% in the past month and 48.3% in the last six months.

Also Read: Lenskart shares get the highest target price so far