Ola Electric shares downgraded, target price cut by 60% after revenue halves in Q3; Stock down 6%

Shares of Ola Electric Mobility Ltd. declined up to 6% on Monday, February 16, after the company reported a negative set of earnings for the third quarter and brokerage firm Emkay Global downgraded its rating and cut its target price by 60%.The analyst now has a ‘sell’ rating from the stock from its previous ‘buy’ recommendation and has cut its price target to ₹20 apiece from ₹50 per share.

Ola Electric’s third quarter revenue halved, while losses remained elevated.
It reported a loss of ₹490 crore in the third quarter compared to a loss of ₹560 crore in the previous one.Its revenue declined 55% from the previous year and was down 32% sequentially.

Ola Electric’s earnings before interest, tax, depreciation and amortisation (EBITDA) loss was at ₹271 crore. It narrowed annually but increased sequentially.

Its gross margin expanded to 34.3% from 18.6% in the year-ago period and from 30.9% in the previous quarter.

Its volumes declined 61% from the previous year and were down 38% sequentially.

Ola Electric’s auto business revenue declined 55% to ₹467 crore from the previous year. Meanwhile, its cell business revenue was at ₹9 crore compared to ₹3 crore in the year-ago period.Emkay Global said Ola logged a weak third quarter. Its underlying electric two-wheeler theme is strong.

The analyst said the industry is witnessing healthy growth, with a revival in penetration following a dip due to recent GST cuts. However, Ola has ssen a consistent volume decline to 32,000 units in the third quarter and market share loss, it said.

Ola is undertaking several measures to improve execution (for eg. store rationalisation to ₹700) and cut costs/conserve cash (guidance for ₹250 crore to ₹300 crore per quarter opex compared to ₹430 crore in the third quarter) and improve brand perception amid severe product/service issues, the brokerage said.

The analyst believes that this could be a difficult, long-drawn process, especially amid greater focus from incumbents and scale-up at Ather. Also, the turnaround would necessitate Ola Electric to have a strong cash balance to survive this phase, it said.

However, as per the brokerage’s calculations, Ola has turned net debt as of the nine months of FY26 at ₹670 crore from net cash of ₹160 crore in the first half of FY26. The upside risk could stem from a strategic stake sale in the battery business, resulting in a meaningful cash infusion, Emkay Global said.

It prefers to play the E2W theme with Ather, TVSL, and Bajaj Auto, it added.

Shares of Ola Electricwere trading 5.4% lower at ₹29.1 apiece just after market open on Monday. The stock has declined 52.4% in the past year.

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