Mumbai: Shares of Ola Electric Mobility fell another 5 percent on Tuesday to hit a new all-time low of Rs 27.36 on the BSE. The sharp fall came after global brokerage Citi downgraded the stock from 'Buy' to 'Sell' and reduced its target price by 51 percent, from Rs 55 to Rs 27.
The stock has declined 14 percent in the last four trading sessions and is down more than 20 percent so far this year.
Why Citi Turned Bearish?
Citi said growth in India’s electric two-wheeler market has been slower than expected. It added that GST-related changes have also slowed the pace of EV adoption.
The brokerage noted that Ola Electric has lost market share due to service-related issues, strong competition and weak customer perception. It also said the company’s volumes are under pressure.
Q3 Results Below Expectations
Ola Electric reported a net loss of Rs 487 crore in Q3 FY26, compared to a loss of Rs 564 crore in the same quarter last year.
Revenue from operations dropped sharply by 55 percent year-on-year to Rs 470 crore, mainly due to lower sales volumes and slower EV growth.
However, adjusted operating EBITDA loss improved to Rs 323 crore from Rs 494 crore a year ago, showing some cost control.
Management’s Reset Strategy
In its shareholder letter, the company described the quarter as a 'structural reset.' It said it has adjusted its retail network, cost structure and business model to strengthen long-term fundamentals instead of focusing only on short-term sales.
Ola Electric reported a record gross margin of 34.3 percent during the quarter, improving both year-on-year and sequentially. The company said better cost control and product improvements helped margins. It expects gross margins to reach 35–40 percent in FY27.
Investor Concerns
Citi warned that continued negative cash flow and rising debt could worry investors. While margins have improved, the brokerage said recovery in volumes and brand perception may take time.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult financial advisors and consider risks before making any investment decisions in equity markets.
