Shares of Ola Electric Mobility Ltd. came under fresh pressure after Goldman Sachs downgraded the electric vehicle maker to Neutral and sharply reduced its price target in a note released on Thursday, February 26.
The brokerage cut its target price by 50% to ₹26 from ₹52 earlier. The revised target stands only marginally above Wednesday’s closing price of ₹25.62, indicating limited upside from current levels.
Revenue Estimates Trimmed; Market Share Outlook Lowered
Goldman Sachs has reduced its revenue projections for FY26 through FY28. The brokerage now expects Ola Electric to command a mid single digit market share in FY30 and beyond, a significant downgrade from its earlier low teens market share expectation.
The revised outlook reflects a more cautious stance on the company’s competitive positioning and long term growth trajectory in the electric two wheeler segment.
Cash Burn May Trigger Fundraising in 12 to 18 Months
According to the brokerage, at the updated EBITDA loss trajectory and planned capital expenditure levels, Ola Electric’s cash burn could necessitate fresh fundraising over the next 12 to 18 months.
This assessment underscores concerns around profitability timelines and capital requirements as the company continues to invest in expansion and product development.
Operational Stabilisation Key for Turnaround
Goldman Sachs outlined several critical steps required to improve the current business trajectory:
- Establishing a sustainable and stable servicing operation
- Building a stable senior leadership team across all domains
- Improving product reliability ahead of the upcoming industry product launch cycle
The brokerage suggested that execution across these areas will be central to restoring investor confidence and improving operational metrics.
Analyst Sentiment Remains Weak
Among the eight analysts covering the stock, none have a Buy rating. Two analysts recommend Hold, while six have a Sell rating.
Kotak Institutional Equities and Emkay Global hold the lowest price targets on the Street at ₹20 each.
Stock Performance and Market Capitalisation
Ola Electric shares closed 1.91% higher at ₹25.62 on Wednesday. However, the stock has declined 32% so far this year.
From its post listing high of ₹157, the stock has corrected 84%. It is also down 66% from its IPO price of ₹76.
The company’s market capitalisation has dropped sharply to ₹11,269 crore from over ₹65,000 crore at its peak, reflecting the steep erosion in investor wealth since listing.
The downgrade and reduced earnings outlook add to existing pressure on the stock as investors closely track execution, market share trends and funding requirements in the evolving electric vehicle landscape.
Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.