Ola Electric shares now a near-consensus ‘sell’ after Goldman Sachs downgrades; stock falls

Shares of Ola Electric Mobility Ltd. declined as much as 4% on Friday, October 23, after global brokerage firm Goldman Sachs downgraded the stock to ‘Sell’ and cut its price target to ₹23 per share.

Goldman Sachs has turned more cautious on Ola Electric amid concerns over the company’s path to generating free cash flow, elevated interest costs and capital expenditure requirements for its electric two-wheeler (E2W) and battery-cell businesses.

The brokerage expects operational losses to persist for longer at current market share levels, making it more challenging for the company to achieve positive free cash flow.

Goldman Sachs also highlighted the scale of revenue growth required to cover capital expenditure and interest payments. Ola Electric would need to generate 3.6-7.1 times its FY26 revenue over FY28-FY30, compared with the 55% decline in revenue between FY24 and FY26.

The brokerage also flagged potential operational challenges in the battery-cell business following the recent departure of its business head.

Reflecting a more challenging market-share environment for Ola Electric relative to its two-wheeler peers, Goldman Sachs cut its revenue estimates for FY27-FY29 by up to 10%.

However, the brokerage outlined factors that could improve its outlook on the stock.

These include a recovery in the electric two-wheeler business following a shift towards a dealer-led sales and service model, which could help improve brand sentiment; positive consolidated operating EBITDA margins; and faster customer wins and improved profitability in the battery-cell business.

Goldman Sachs’ downgrade adds to the cautious analyst outlook on the stock. None of the eight analysts covering Ola Electric Mobility has a ‘Buy’ rating. One has a ‘Hold’ rating, while the remaining seven have assigned ‘Sell’ ratings.

Ola Electric shares were trading 4.07% lower at ₹30.64 on Friday. The stock has declined around 17% so far this year.