Shares of Ola Electric Mobility Ltd. experienced a significant 6 percent decline in Friday's trading session. This drop follows the electric vehicle (EV) manufacturer's September quarter results, which prompted at least three major brokerages—Goldman Sachs, Citi, and Kotak Institutional Equities—to reiterate their 'Sell' ratings on the stock.
Brokerages Maintain 'Sell' Ratings and Lower Targets
The updated target prices from these brokerages indicate a potential downside of up to 50 percent from Thursday's closing price of Rs 35.74. Specifically:
- Kotak Institutional Equities set the lowest target price at Rs 18 per share, a reduction from its previous Rs 19.64.
- Goldman Sachs maintained its 'Sell' rating, lowering its target price to Rs 22 from Rs 23.
- Citi also reduced its target, now at Rs 21 from an earlier Rs 25.07.
On Friday, Ola Electric shares opened 3.37 percent lower at Rs 34.56 apiece, eventually hitting an intraday low of Rs 33.50, representing a 6.24 percent fall.
Q2 FY27 Financial Performance Highlights Widening Losses
The revised brokerage targets come after Ola Electric Mobility Ltd. reported a sequential widening of its net losses and a year-on-year (YoY) decrease in revenue from operations for the second quarter of FY27.
- Consolidated net loss widened to Rs 362 crore in Q2, up from Rs 336 crore in Q1 FY27. This compares to a loss of Rs 418 crore in the year-ago quarter.
- Revenue from operations declined 38.99 percent YoY, reaching Rs 421 crore in the September quarter, down from Rs 690 crore in the same period last year.
- Operating EBITDA loss stood at Rs 218 crore, compared to a loss of Rs 203 crore in the corresponding quarter last year.
Kotak Institutional Equities noted that Ola Electric's Q2 EBITDA loss exceeded their expectations due to lower volumes and gross margins. They expressed concerns about the sustainability of volume recovery given perceived weak brand equity and highlighted challenges like free cash flow (FCF) outflows, which could deplete cash reserves if volume trends do not improve.
Company Addresses Shareholders on Balance Sheet and Growth
In a separate communication to shareholders, Ola Electric affirmed that its Qualified Institutional Placement (QIP) and rights issue have strengthened its balance sheet, leading to significant deleveraging. Total borrowings decreased from Rs 3,132 crore in December 2024 to Rs 1,819 crore in September 2026. Specifically, auto borrowings reduced from Rs 2,422 crore to Rs 337 crore.
The company stated, "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." Ola Electric also highlighted strong cell macro conditions and government focus on components and lithium refining as drivers for its cell business, positioning both Auto and Cell as long-term growth engines.