Ola Electric share price targets: Buy after Q1 results? Goldman Sachs, Emkay share views

Ola Electric Mobility Ltd, which is not tracked by many brokerages, received a 'Neutral' rating from Goldman Sachs following its June quarter results. Cash burn remained a concern, the foreign brokerage said. Emkay Global, on the other hand, retained its 'Sell' call on the stock, saying Q1 results were mixed for the electric two-wheeler maker, with rising competitive intensity likely to hurt market share going ahead.

Ola Electric reported a narrowing of Q1 net loss at Rs 336 crore compared with a loss of Rs 426 crore in the year-ago quarter. Ola said its revenue fell 45 per cent year-on-year (YoY) to Rs 455 crore from Rs 828 crore, a year earlier. In a press release, Ola said its orders increased to 44,071 units in Q1 from 22,522 units in Q4, while deliveries rose to 39,192 units in Q1 from 20,256 units in Q4.  Auto revenue from operations increased 72 per cent quarter-on-quarter (QoQ), and gross profit improved to approximately Rs 139 crore, it said.  "Auto gross margin remained healthy at 30.5 per cent despite a challenging commodity environment," it said.

Emkay Global said while Ola’s volume rose 93 per cent sequentially, it would still maintain a cautious stance with respect to to sustainability of this recovery and see volume andshare trends as monitorable, given that Ola’s E-2W market share rose to 8.3 per cent in 1Q against 5 per cent in Q4 as incumbents TVS, Bajaj and  HMCL are ramp up capacities. The domestic brokerage expects competition to intensify as Ather’s AURIC plant comes online in Q3.

"While Ola is adopting measures to improve execution, cut costs/conserve cash (guided Rs 300 crore quarterly opex; Rs 380 crore in Q4FY26), and improve brand perception. We believe this could be a difficult, long-drawn-out process, due to greater focus by incumbents + scale-up at Ather. The 13 per cent change in FY27E-28E EPS mainly reflects lower opex/depreciation. We retain SELL/TP of Rs 30 at 3.5x EV/S (Auto business) and opt to play the E-2W theme via Ather and TVSL," Emkay Global said.

There are a total six 'Sell' calls on the stock and two 'Hold' recommendations, with the Bloomberg consensus target of Rs 31.25 implying 24 per cent downside for the stock. Goldman Sachs suggested a target of Rs 40 on the stock.