Ola Electric shares hit all-time low: What's the reason?
What's the story
Ola Electric Mobility's shares plummeted over 7% today to an all-time low of ₹28.81, following the company's disappointing Q3 results. The company's revenue for the December quarter stood at ₹470 crore, a massive 55% decline from ₹1,045 crore in the same period last year. The firm also reported a loss of ₹487 crore for this period.
Reaction
Emkay Global downgrades stock rating
The disappointing Q3 performance has led Emkay Global to downgrade Ola Electric's stock rating from 'buy' to 'sell.' The brokerage firm also slashed its target price for the stock by a whopping 60%, from ₹50 per share to just ₹20. This drastic revision indicates a potential downside of over 35% from the stock's previous closing price of ₹30.89 per share.
Strategic shift
Focus shifts to increasing installed capacity
Ola Electric's founder and CEO Bhavish Aggarwal revealed that the company has completed its major investment phase. He said that the firm will now focus on increasing its installed capacity and addressing service execution issues. Despite the disappointing Q3 results, Emkay Global noted that the underlying electric two-wheeler theme remains strong with healthy growth in the industry.
Market challenges
Ola Electric faces tough road ahead
Ola Electric has witnessed a steady decline in volume, dropping to 32,000 units in Q3. The company has also lost market share. Emkay Global said that this could be a long-drawn process for Ola, especially with increased focus from incumbents and scale-up at Ather. Kotak Securities echoed similar sentiments, predicting huge net losses and net worth erosion for the company in FY26-FY28.