Ola share price tumbles 6%; Goldman Sachs, Citi, Kotak targets suggest up to 50% downside

Ola Electric Mobility Ltd shares fell 6 per cent in Friday's trade as at least three brokerages covering the stock maintained 'Sell' ratings on the electric vehicle (EV) maker following its September quarter results. The lowest target price on Ola Electric is from Kotak Institutional Equities at Rs 18 per share, down from Rs 19.64 earlier. Goldman Sachs has a 'Sell' rating with a reduced target of Rs 22 from Rs 23 earlier. Citi has a target of Rs 21, down from Rs 25.07 earlier. The targets suggest up to 50 per cent potential downside from Thursday's closing price of Rs 35.74.

On Friday, the scrip opened 3.37 per cent lower at Rs 34.56 apiece before falling 6.24 per cent to hit a low of Rs 33.50.

The brokerage targets come as Ola Electric Mobility Ltd reported a sequential widening of net losses and a year-on-year (YoY) fall in revenue from operations. The company's consolidated net loss widened to Rs 362 crore in Q2 from Rs 336 crore in Q1 FY27. Ola reported a loss of Rs 418 crore in the year-ago quarter.

"Ola Electric's Q2 Ebitda loss came in higher than our expectations, due to lower volumes and gross margins. Sustenance of volume recovery needs to be seen as brand equity remains weak, in our view. We believe the company will have to work on multiple levers to remain competitive in order to improve its positioning. Ola Shakti is yet to scale up and we will await execution before ascribing any value to this business. FCF outflows pose another challenge and the company risks exhausting its cash reserves if the current volume trajectory does not improve," Kotak said.

Revenue from operations declined 38.99 per cent YoY to Rs 421 crore in the September quarter, compared with Rs 690 crore in the year-ago period.

Operating Ebitda loss stood at Rs 218 crore, against a loss of Rs 203 crore in the corresponding quarter last year.

Separately, addressing shareholders, Ola Electric said, "The QIP and rights issue strengthened our balance sheet, and we have deleveraged significantly. Total borrowings came down from Rs 3,132 crore in December 2024 to Rs 1,819 crore in September 2026."

The company added, "Specifically, Auto borrowings reduced from Rs 2,422 crore to Rs 337 crore. With low Auto debt, a healthy gross margin and cost structure, and a much-improved working capital cycle under the dealer model, we expect Auto to generate free cash flow in the near term."

Commenting on its cell business and growth prospects, the pure-play EV firm said, "The cell macro is also strong, with government focus on components and lithium refining, and growing storage deployments with higher localisation requirements. Through this transformation, our balance sheet is much more stable, our cost base is structurally and meaningfully lower, we are not demand constrained, and we have two long-term growth engines: Auto and Cell."