EV stock down 82% from all-time high; Citi cuts Ola Electric target with 'Sell' rating - Here's why

Ola Electric Share Price Target: The decline in Ola Electric shares shows no signs of stopping. On February 17, the stock fell 5% intraday to hit a 52-week low of Rs 27.36. This marks the fourth consecutive session of decline, with the stock losing around 12% over these four days alone. From a long-term perspective, the situation is even more worrying for investors. The stock is down nearly 61% from its 52-week high of Rs 71.25. It has fallen 64% from its IPO price of Rs 76 and is down 82% from its all-time high of Rs 157.40 recorded in August 2024.

Impact of Weak Quarterly Results

The December quarter (Q3 FY26) results have further increased market concerns. The company’s net loss narrowed to Rs 487 crore from Rs 564 crore in the same quarter last year. However, the real setback came on the revenue front.

Consolidated revenue from operations dropped 55% to Rs 470 crore, compared to Rs 1,045 crore a year ago. During the quarter, the company delivered 32,680 units.

The company described the period as a “structural reset,” rebalancing its retail network, cost structure, and operating model. This move comes amid slower EV penetration and ongoing service-related issues.

Interestingly, the company reported a record gross margin of 34.3% in Q3, an improvement of 15.7 percentage points year-on-year. This was attributed to its vertically integrated model and the Gen 3 platform.

The company stated that operational transformation and AI-driven automation could reduce operating expenses to Rs 250-300 crore over the next few quarters. EBITDA breakeven may be achievable at around 15,000 units per month. Management claims that if demand improves, the current model can support 3-4x volume scaling.

Global brokerage Citi has assigned a ‘Sell’ rating to Ola Electric and cut its target price from Rs 55 to Rs 27.

Citi believes EV penetration is slower than expected, and market share is under pressure due to service quality concerns and intense competition. Also, negative cash flow and weak operating leverage could weigh investor sentiment.

The brokerage has reduced its EV/Sales multiple from 4.5x to 3.5x, reflecting a stricter stance on valuation.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)