Ola Electric on Sunday launched two electric scooters with some novel features. It joined some of the other startups including Ather Energy and Simple Energy that already have products in the market. Other major firms also have a few products but they are not marketed well compared to their petrol and diesel variants.
“We believe incumbent OEMs could see de-rating if they don’t launch compelling products or continue ignoring this segment,” said Kapil Singh and Siddhartha Bera of Nomura in a report.
“Auto component companies such as Sona Comstar and are already supplying products to these segments and could be potential beneficiaries if adoption picks up sharply,” the report said.
Ola Electric has priced its electric
at Rs 1 lakh for the entry-level S1 model and Rs 1.3 lakh for the long-range S1 Pro model. In some states, these models will be cheaper thanks to subsidies provided by the government.
With subsidy, the starting pricing will be the lowest in Gujarat (Rs 80,000), followed by Delhi (Rs 85,000), Rajasthan (Rs 90,000) and Maharashtra (Rs 95,000). This is very close to the on-road price of the Honda Activa 6G petrol scooter, analysts noted.
“The good range of the base model, portable charging option, high speed, pan-India availability and significantly lower cost of ownership will accelerate adoption and help gauge the demand in the segment,” said Singh and Bera.
They argue, consumers who prefer more premium scooters like Activa 125cc or TVS Ntorq for their superior features will likely be the early adopters of Ola electric’s scooters.
In July, the industry sold around 13,000 units of electric scooter, which was 1.2 per cent of total sales. Nomura estimated domestic EV two-wheeler sales to touch 10 per cent of the industry by FY26.
Recent reports suggest Bajaj Auto has formed a 100 per cent subsidiary to focus on electric, while
plans to launch scooters with battery swapping facility. The latter also holds a stake in Ather Energy.
Nomura values Minda Industries at 30x on FY23 estimated EPS to arrive at a target price of Rs 733. Target P/E of 30x is at +1SD of historical average, to factor in strong ROEs and company’s ability to grow faster than the industry.
The broker said its target price of Rs 505 on recently-listed Sona BLW Precision Forgings is based on 45x PE on FY24 estimated EPS, discounted back to September 2023.
