Ola Electric shares rally over 8% but GST news could be negative for EVs

Shares of Ola Electric Mobility surged as much as 8.5% on Tuesday to Rs 44.70 on the BSE, even as looming reforms to India’s Goods and Services Tax (GST) regime raised concerns that electric vehicles could lose ground to traditional cars if tax cuts disproportionately favor internal combustion engine (ICE) models.

On Tuesday, 2,482.59 lakh Ola Electric shares worth Rs 1,086.38 crore changed hands on the NSE. The rebound came after Ola Electric bucked a broad auto rally on Monday, slipping 0.3% to Rs 41.21, even as the Nifty Auto index jumped 4.2% on optimism that GST cuts could drive demand. Maruti Suzuki led the gains with an 8.8% surge on Monday, while Hero MotoCorp advanced 5.9%.

Prime Minister Narendra Modi last week said the government plans to lower GST rates on several categories of goods and services by Diwali, India’s peak shopping season. Reuters reported that proposals under discussion include cutting GST on small cars to 18% from 28% and reducing health and life insurance premiums to as low as 5% or zero.

Brokerages flag risks for EVs

HSBC Global Research warned that while a GST reduction “may positively impact auto demand, though OEM-wise impact may vary,” it could be “negative for EVs and possibly increase road tax in some states.”

The brokerage outlined three possible scenarios for GST restructuring, with the most likely outcome being lower taxes on small cars and two-wheelers—categories dominated by internal combustion vehicles. “While 2Ws and small cars look certain to be beneficiaries, the impact on EV companies is negative and on large vehicles uncertain,” HSBC said.

Nomura struck a similar note. “If the GST cut on ICE vehicles happens, it is likely to significantly impact EV adoption, as the price gap between EVs (taxed at 5%) and ICE vehicles (taxed at 28%+ cess) would increase sharply,” the brokerage said. Nomura added that such a move would be “negative for companies which are pure EV companies, such as Ola and Ather.”

Q1 earnings

In July, Ola Electric reported a consolidated net loss of Rs 428 crore for the quarter ended June 30, 2025, a 23% increase from a loss of Rs 347 crore a year earlier. Revenue from operations fell sharply by 49.6% year-on-year to Rs 828 crore during Q1, compared with Rs 1,644 crore in the same period last year.

Total expenses fell 42.4% to Rs 1,065 crore during the quarter, but gross margin dropped 29.4% to Rs 214 crore. EBITDA losses widened to Rs 237 crore in the June quarter, with the EBITDA margin at -28.6%, compared with -12.5% a year earlier.

Stock performance and technicals

Shares of Ola Electric have shed 49% so far in 2025 and are down 70% over the past year. Over the last three months, the stock has dropped nearly 16%, though it has gained more than 7% in the past month.

From a technical standpoint, the stock is currently trading above five of its eight key simple moving averages (SMA), including the 5-day, 10-day, 20-day, 30-day, and 50-day SMAs, indicating bullish undertones in the short-term charts, while trading below its 100-day, 150-day, and 200-day SMAs, indicating bearish undertones in the long-term charts.

The Relative Strength Index stands at 48.5, indicating the stock is neither overbought nor oversold. The Moving Average Convergence Divergence is at -0.6 and below both the center and signal lines, reinforcing a bearish undertone.

Also read | Rs 2.4 lakh crore GST boost! Jefferies, Morgan Stanley decode impact on stocks, economy

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