'Doubts on survival': Ola Electric shares see 60% price target cut; here's why 

Emkay Global has downgraded Ola Electric Mobility Ltd to 'Sell' from 'Buy' and cut its target price by 60 per cent to Rs 20 from Rs 50, following a weak December quarter performance and rising balance sheet stress. Ola Electric's current state casts doubts on survival, the domestic brokerage said.

It said underlying electric two-wheeler theme remained strong, with industry volumes growing 33 per cent and 24 per cent year-on-year (YoY) in January and February 2026, respectively, and penetration reviving after a dip following GST cuts. However, Ola continued to underperform peers, with volumes declining to 32,000 units in Q3FY26 from 1,25,000 units in Q1FY26. The company ranked fifth in the industry with a 6 per cent market share, Emkay said.

It believes the turnaround could be a difficult and prolonged process for Ola Electric, particularly amid greater focus from incumbents and scale-up at Ather Energy Ltd. It said that a successful turnaround would require a strong cash buffer. As per its calculations, Ola turned net debt of Rs 670 crore as of nine months FY26 from net cash of Rs 160 crore in H1FY26.

The domestic brokerage said Ola's Q3 revenue declined 55 per cent YoY in Q3FY26, led by a 61 per cent drop in volumes. Gross margin expanded 340 basis points quarter-on-quarter (QoQ) to 34.3 per cent, aided by production-linked incentive accrual for Gen3 products. However, Ebitda margin losses widened sharply to negative 58 per cent from negative 29 per cent in Q2FY26.

Emkay Global said upside risk could stem from a strategic stake sale in the battery business, which could result in a meaningful cash infusion. Emkay said it preferred to play the electric two-wheeler theme through Ather Energy Ltd, TVS Motor Company Ltd and Bajaj Auto Ltd.The domestic brokerage noted that Ola is undertaking several measures to improve execution, including rationalising its store network to around 700 outlets, reducing operating expenditure and conserving cash.

The management has guided for quarterly operating expenditure of Rs 250-300 crore compared with Rs 430 crore in Q3FY26. The company also aimed to improve brand perception amid product and service issues, despite having sold over 10 lakh electric two-wheelers since launch, Emkay said.