Ola Electric Shares Jump 23% in 3 Sessions; GST Cut Buzz Lifts Auto Sector
Ola Electric’s stock staged a strong comeback this week, surging 23% in three consecutive sessions, including a sharp 15% rally on August 20. The rebound comes after months of weak performance, with the stock down nearly 63% over the past year.
Market experts attribute the latest momentum to heavy trading volumes, upbeat announcements during Ola’s Sankalp Day event, and a technical breakout that signals renewed investor interest.
Ola Electric Rally: What Triggered the Surge?
Analysts point to three factors behind the stock’s rally:
- Sankalp Day announcements: Ola Electric outlined fresh EV launches, capacity expansion, and future growth plans.
- Technical charts: High-volume buying pushed the stock above key resistance levels, sparking bullish signals.
- Sector-wide optimism: Investor sentiment across the automobile sector has turned positive due to policy and cost-related tailwinds.
Auto Sector Boost: GST Cuts on the Horizon
The Ola Electric rally comes as the broader auto sector in India gains momentum. The government is reportedly considering a GST rate cut on cars and two-wheelers from 28% to 18%.
- Small cars may get cheaper by around 8%, while larger vehicles could see a 3–5% price drop.
- The move is aimed at reviving demand after sluggish sales in early FY26.
- Analysts warn this could trim government revenue by $4–6 billion annually, but industry players see it as a major demand booster ahead of the festive season.
Other supportive trends include falling steel prices, lower financing rates, and strong rural demand, all of which are expected to improve margins and lift vehicle sales.
Challenges Still Cloud Ola Electric’s Outlook
Despite the sharp rally, concerns remain around Ola Electric’s fundamentals:
- The company’s Q1 FY2025 results were weak, raising questions about profitability.
- Ola’s two-wheeler EV market share has declined due to rising competition.
- Even after the recent rally, the stock is still deeply in the red compared to last year.
Investor Takeaway
Ola Electric’s recent rally reflects short-term optimism supported by sector-wide triggers such as the potential GST cut and easing input costs. Traders may find opportunities in the current momentum, but long-term investors should remain cautious until the company demonstrates sustained profitability and market share stability.
With India’s auto sector outlook turning positive on policy reforms and strong macro growth, Ola Electric may benefit — but its turnaround remains a work in progress.
