Ola Electric revenue halves in Q3, losses remain elevated; stock in focus

Shares of Ola Electric Mobility Ltd. are in focus 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 Electric ended the previous session flat at ₹30.92 apiece. The stock has declined 49.6% in the past year.

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