Goldman Sachs Projects Ola Electric to Outpace Rivals in Revenue and Volume Growth Over Next Three Years

Goldman Sachs has released a bullish report on Ola Electric, anticipating substantial growth in both revenue and volume over the next three years. The international brokerage firm’s analysis underscores Ola Electric’s strong position in the rapidly expanding electric two-wheeler market, with projections suggesting the company will significantly outperform its competitors.

Revenue and Volume Growth Forecast

Goldman Sachs predicts that Ola Electric will achieve revenue growth 2.5 times faster than its peers in the Indian two-wheeler market. This projection reflects the company’s robust strategy in the electric vehicle sector and its anticipated market expansion. The brokerage firm expects Ola Electric’s revenue to increase by more than 40% annually from FY24 to FY27. In comparison, the projected revenue growth for other major players such as TVS Motor, Bajaj Auto, and Hero MotoCorp is relatively modest, at 16%, 19%, and 10% respectively.

In terms of volume growth, Goldman Sachs forecasts a staggering 57% annualized increase for Ola Electric over the same period. This contrasts sharply with the growth rates projected for TVS Motor (+9%), Bajaj Auto (+12%), and Hero MotoCorp (+6%). The expected acceleration in Ola Electric's volume growth is attributed to its aggressive expansion and innovative approach in the electric two-wheeler segment.

Target Price and Buy Rating

Goldman Sachs has initiated coverage on Ola Electric with a "buy" rating and a target price of ₹160 per share. This target price represents a 50% upside from the current trading price of ₹110. The buy rating is supported by the firm’s positive outlook on Ola Electric’s growth trajectory and its strategic advantages in the electric vehicle market.

Financial Performance and Market Leadership

Despite reporting a net loss of ₹347 crore—a 30% increase year-on-year—Ola Electric has shown significant revenue growth. The company’s consolidated revenue from operations rose by 32%, reaching ₹1,644 crore in Q1 FY24, up from ₹1,243 crore in the previous quarter. This financial performance reflects Ola Electric’s ability to maintain its market leadership position, driven by its value-for-money proposition and lower running costs per kilometre.

As of August, Ola Electric held a market share of 29% in the electric two-wheeler segment. The company has also achieved cumulative sales of 297,690 units over the past eight months, surpassing its competitors and reinforcing its leading position in the market.

Product Roadmap and Future Prospects

Goldman Sachs' report highlights Ola Electric’s product roadmap as a key factor contributing to its optimistic outlook. The firm is set to roll out its electric motorcycle portfolio starting from the March quarter of 2025. This expansion into electric motorcycles, along with other strategic initiatives, is expected to further bolster Ola Electric’s market presence and drive future growth.

The report also emphasizes that Ola Electric’s focus on innovation and its commitment to enhancing its product lineup will play a crucial role in sustaining its competitive edge and achieving the projected growth targets.

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Goldman Sachs’ initiation of coverage on Ola Electric with a "buy" rating and a target price of ₹160 per share underscores the brokerage firm’s confidence in the company’s growth potential. The forecasted revenue and volume growth rates significantly surpass those of its peers, reflecting Ola Electric’s strong market positioning and strategic focus on the electric two-wheeler segment. As Ola Electric continues to innovate and expand its product offerings, it is well-positioned to capitalize on the evolving electric vehicle market and deliver substantial returns to investors.

[Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor before making any investment decisions.]