Shares of Ola Electric Mobility Ltd. experienced a significant 6% decline in Friday's trading session. This downturn came as at least three major brokerages—Goldman Sachs, Citi, and Kotak Institutional Equities—reiterated their 'Sell' ratings on the electric vehicle (EV) manufacturer.
Brokerage Targets Signal Further Decline
The updated target prices from these brokerages indicate a potential downside of up to 50% from Thursday's closing price of Rs 35.74 per share. Kotak Institutional Equities set the lowest target at Rs 18 per share, a reduction from its previous Rs 19.64. Goldman Sachs also lowered its target to Rs 22 from Rs 23, maintaining a 'Sell' rating. Citi, similarly, adjusted its target downwards to Rs 21 from Rs 25.07.
On Friday, the scrip opened 3.37% lower at Rs 34.56 apiece before deepening its fall to hit a low of Rs 33.50, representing a 6.24% decrease.
Q2 FY27 Results Disappoint Investors
The brokerages' bearish outlook follows Ola Electric Mobility Ltd.'s September quarter (Q2 FY27) financial results, which revealed a sequential widening of net losses and a year-on-year (YoY) decline in revenue from operations. The company's consolidated net loss expanded to Rs 362 crore in Q2, up from Rs 336 crore in Q1 FY27, though it was an improvement from the Rs 418 crore loss reported in the year-ago quarter.
Kotak Institutional Equities commented on the results:
"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."
Revenue from operations saw a substantial drop of 38.99% YoY, falling to Rs 421 crore in the September quarter from Rs 690 crore in the same period last year. Operating Ebitda loss also widened to Rs 218 crore, compared to a loss of Rs 203 crore in the corresponding quarter last year.
Company Addresses Financial Health and Future Outlook
Despite the challenging quarter, Ola Electric communicated to its shareholders that recent financial maneuvers have strengthened its balance sheet. The company stated, "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."
Specifically, auto borrowings were reduced from Rs 2,422 crore to Rs 337 crore. The company expressed optimism about its 'Auto' segment, expecting it to generate free cash flow in the near term, citing low auto debt, healthy gross margins, and an improved working capital cycle under its new dealer model.
Regarding its cell business and growth prospects, Ola Electric highlighted strong government focus on components and lithium refining, alongside growing storage deployments. The company concluded, "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."