Mumbai: Shares of Ola Electric Mobility plunged more than 6 per cent during Friday's trading session after global brokerage Goldman Sachs downgraded the stock from neutral to sell, citing concerns over cash flow, funding requirements and declining market share.
The Ola Electric share price touched an intraday low of Rs 29.86 on the BSE, falling approximately 6.5 per cent after opening at Rs 31.50.
Goldman Sachs Cuts Ola Electric Target Price
Goldman Sachs sharply reduced its 12-month target price for Ola Electric shares to Rs 23 from Rs 39.28. The brokerage highlighted uncertainty surrounding the company's ability to generate sustainable free cash flow amid rising interest expenses and substantial capital expenditure requirements. Investments in battery manufacturing and electric two-wheeler operations are expected to keep financial pressure elevated.
Ola Electric Faces Revenue And Funding Challenges
According to Goldman Sachs, Ola Electric could face prolonged operating losses at its current market share levels. The brokerage estimated that revenue during FY28-FY30 would need to reach 3.6 to 7.1 times FY26 levels to support existing capital expenditure and interest obligations.
This comes after the company's revenue declined 55 per cent in FY26 compared with FY24. Goldman Sachs also reduced its FY27-FY29 revenue projections by up to 10 per cent.
Battery Business And Market Share Concerns
The brokerage flagged operational uncertainties in Ola Electric's battery cell business following the departure of its business head. However, analysts indicated that improved dealer-led sales, servicing operations and customer sentiment could support recovery.
Ola Electric Share Price Performance
Ola Electric shares have declined more than 40 per cent over the past 12 months and approximately 16 per cent so far this year. Investors will closely monitor the company's electric vehicle sales, funding requirements, market share and profitability outlook.
