Ola Electric Mobility shares fall 7% after Q4 net loss widens; Kotak sets target of ₹30

Shares of Ola Electric Mobility Ltd. are in focus on Friday, May 30, after the company's net loss widened from last year during the January-March quarter.

Brokerage firm Kotak Institutional Equities has downgraded the stock to "sell" from its earlier rating of "reduce". The brokerage has also cut its price target on the stock to ₹30 from ₹50 earlier.

The revised price target from Kotak is 60% lower than the IPO price of ₹76, and 80% lower than the post-listing high of ₹157, that the stock had seen in just a few days after listing.

Ola Electric's net loss widened to ₹870 crore during the March quarter, compared to a net loss of ₹416 crore during the same quarter last year. Revenue also declined by 62% from last year.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) loss also widened to ₹695 crore from a loss of ₹312 crore last year.

However, for the June quarter, Ola Electric is expecting its adjusted revenue to grow between 23% to 31% from the previous quarter last year, deliveries to grow by 28% from last year.

Kotak Institutional Equities wrote in it note that Ola Electric's EBITDA loss for the quarter came in much above their expectations due to higher warranty provisions and weaker volumes.

The brokerage expects EBITDA losses to continue amidst weakening brand equity amid weakening brand equity and increasing competitive intensity.

"Ola Electric’s future hinges on scaling up volumes and successful motorcycle foray, which faces executive and credibility challenges," Kotak wrote in its note.

As a result, Kotak has cut its financial year 2026-2027 volume assumptions by 32% to 34% to factor in growth assumptions for the Electric Vehicle two-wheeler industry and a delay in the motorcycle launches.

However, it does anticipate profitability to improve from the current financial year driven by the cost-cutting initiatives, shift towards the Gen-3 platform and a reversal of warranty costs.

Volumes remaining below expectations is a cause of concern for Ola Electric, according to the Kotak note.

"Better-than-expected performance of the motorcycle portfolio and successful ramp-up of Gigafactory remain key upside risks to our thesis at the current juncture," the brokerage said.

On the flip side, Goldman Sachs has a "buy" rating on Ola Electric with a price target of ₹70, which is also below the company's IPO price.

The brokerage sad that battery cell manufacturing yields are presently at 63% and the management said that it will start putting these cells into its own electric two-wheelers once the yield reaches over 80%, which is still a few months away.

Out of the eight analysts that have coverage on Ola Electric, four of them have a "buy" rating on the stock, while two each have a "hold" and "sell" rating.

Shares of Ola Electric Mobility ended 0.5% lower on Thursday at ₹53.2, ahead of the earnings announcement.