Ola Electric shares plunge 8% as Govt slashes GST on two-wheelers with up to 350 cc capacity

Shares of Ola Electric fell nearly 8% to hit the day's low of Rs 63.71 on the NSE on Thursday after the government cut the Goods and Services Tax (GST) on two-wheelers with engine capacity up to 350 cc to 18% from 28%.

The move, aimed at boosting ICE two-wheeler sales, is seen weighing on electric two-wheeler demand sentiment, though the actual impact will play out over time.

As a fallout, over 58 crore shares of Ola Electric changed hands on the NSE at around 1:30 pm.

The company also announced stake sale by Japan's Softbank minutes before the market closing hours, likely impacting the sentiments further.

Read More: Japan's SoftBank sells 2.15% stake in Ola Electric, cuts holding to 15.68%

Anuj Gupta, Director at Ya Wealth Global Research, said that the profit booking in Ola shares was on account of the GST setback, but the stock still looks positive for targets up to Rs 90-100 as the new EV policy will support the stock.

The new rates become effective from September 22.

Ola Electric shares have seen a sharp rebound, emerging as one of the top-performing new-age counters in recent weeks. The stock rallied nearly 73% till Wednesday from the 52-week lows of Rs 39.60 hit on July 14.

While Prime Minister Narendra Modi's Independence Day speech gave a temporary setback to the counter, company securing an approval under the government’s Production Linked Incentive (PLI) scheme gave it a fresh impetus, leading to a strong rally.

The Automotive Research Association of India (ARAI) recently granted approval to Ola under the Ministry of Heavy Industries’ PLI scheme for its Gen 3 S1 scooter lineup.

This certification makes Ola eligible for incentives of 13% to 18% of sales value until 2028. Notably, the approval extends across all seven Gen 3 S1 models, which together account for more than half of Ola’s sales.

Also Read: M&M, Maruti, Hero Moto and other auto stocks rally up to 8% on GST cut boost

Management has termed the development a structural milestone that could directly improve cost efficiency and margins, bringing the company closer to profitability.

Ola Electric Q1 performance

Ola’s strong stock rally in 2025 contrasts with its financial strain. The company posted a net loss of Rs 428 crore in the June quarter, deeper than a year ago, as revenue slid 50% year-on-year to Rs 828 crore.

On the brighter side, gross margins improved to 25.6%, aided by cost support from its PLI certification. The management also secured shareholder approval to reallocate IPO funds and extend deployment timelines, reiterating its focus on capital discipline.

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