Prime Stocks update: How this EV player is placed now

1. 

   ellesh.bohra

   June 3, 2023 at 9:40 am

   There seems to be quite a lot of volatility in this stock in last 2 months. I had bought this at 130 last month and exited and 152. It is now back to 130 levels.

   Do you suggest fresh investment in this stock at this level?

   I think the government subsidy rollback is going to impact it a lot, as their vehicles were substantially cheap with the subsidy and even I thought at once that the price at each they were selling was very lucrative and was thinking of buying one. But if someone has to pay higher price i.e. > 1 lacs or so then no body is going to consider buying ampere and will rather go with branded names like TVS, Ather, Ola.
2. 

   ellesh.bohra

   June 3, 2023 at 9:37 am

   There seems to be quite a lot of volatility in this stock in last 2 months. I had bought this at 230 last month and exited and 152. It is now back to 130 levels.

   Do you suggest fresh investment in this at this level?

   I think the government subsidy rollback is going to impact it a lot, as there vehicles were substantially cheap with the subsidy and even I thought at once that the price at each they were selling was very lucrative and was thinking of buying one. But if someone has to pay higher price i.e. > 1 lacs or so then no body is going to consider buying ampere and will rather go with branded names like TVS, Ather, Ola.
   1. 

      N V Chandrachoodamani

      June 3, 2023 at 12:32 pm

      Welcome your query sir

      First of all, the outcome of subsidies and resultant EV revolution are 2 things

      1) People got very innovative and sophisticated products like Ather & OLA
      2) People now understand that EV is both a viable and reliable alternative to ICE vehicles

      While subsidies have made it a STEAL DEAL Vs Petrol 2 wheelers, this will change a bit now
      Only those with higher usage will find it viable now. Hope the favorable bias of urban millennials & Gen Z will continue

      EV players are aware of it and they have taken price hikes in such as way that EVs still stand not just as a viable but a lucrative alternative

      Specifically on Ampere, I visited their showroom on June 1st after price hike
      Basic product (Magnus Ex) goes to 1.05lac Ex-showroom and the new product (Primus) goes to 1.49 lac, at par with I-Qube

      For those looking for a minimum use alternative Vs a petrol 2 wheeler, the basic product (Magnus EX)is still a viable alternative. No doubt. But it could be challenged at this price point by OLA S1 Air, the basic product from OLA

      On the other hand, its new product (Primus) is superior and feature rich (Mid-mount motor, LFP battery) Vs I-Qube at similar price, but it lags on brand equity.

      I would have been happy with Ampere maintaining reasonable price differential with directly competing products at this stage. It still could have priced its basic product nearly at par with a petrol 2 wheeler to win on consumer sentiment

      But this is their call and they may also take revisions based on what others are doing or how market is behaving

      As mentioned in our update article on Greaves Cotton, this has become a Venture Capital kind of investment opportunity for investors; high risk – high reward. One has to play it through a certain initial allocation in the equity portfolio and take it higher as things turn better

      Next 3 quarters of FY24 will show whether EVs are on a strong footing and can stand on their own feet. If they survive FY24, then they will survive post FY24 as well when subsidies fully end

      Ampere has to be conscious on its market share and play its pricing game smartly to stay relevant. Losing market share can be costly for it as it has already put a large network.

      Thank you
      1. 

         ellesh.bohra

         June 4, 2023 at 1:27 am

         Thanks a lot for your response. It will indeed help a lot to plan out the investment strategy.
3. 

   Arun Kumar M S

   January 27, 2023 at 1:51 pm

   Thanks for this write up.
   Curious to know about GEMPL’s ability to sell; whilst I understand that they stand 4th in terms of ’22 sales figures I am keen to know abt their distribution network & plans surrounding expansion around that, branding & such detail.
   And on these lines, how well positioned it is to tackle the situation when large players like Hero & TVS up their EV game in years ahead.
   1. 

      N V Chandrachoodamani

      January 27, 2023 at 2:53 pm

      Welcome your query sir,

      Its a tough game even for incumbents. New players like Ather & OLA has set new benchmarks on design, features & quality
      GEMPL is moving in the right direction. They are quite OK with their manufacuturing, sales network, R&D and even brand recall in mass market segment.
      They have to put a tough fight for their market share, only TVS among incumbents has done well on mass premium segment so far.

      Top 2 gave up entire scooter segment to Honda 2 decades ago and could never make a comeback. Only TVS has been able to make a mark in scooters segment.

      Thank you
4. 

   nikhilchitalia

   January 27, 2023 at 12:33 pm

   Good Research. Is there more downside expected in this stock during pre budget days.
   1. 

      N V Chandrachoodamani

      January 27, 2023 at 2:46 pm

      Welcome your query sir,

      Budget shouldn’t have any impact. If Govt. decides to continue subsidy for EVs beyond March 2023 in this budget, that would be welcomed by the industry

      Thank you
5. 

   vdumashanker

   January 27, 2023 at 11:59 am

   Very good data. And fair enough conclusion recommending it for only high-risk investors. The market potential is good. One comment I have is that considering the lead that Ampere had compared to the others, and the fact that R&D is in-house, they should have made a bigger impact by now in the market.
   1. 

      N V Chandrachoodamani

      January 27, 2023 at 2:45 pm

      Welcome and agree with your comments sir

      Greaves inherited a basic low end product portfolio from Ampere. Ather & OLA have set new benchmarks.
      But Ampere is moving in the right direction. They have to put a strong fight for their share of market

      Thank you

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