Ola Electric shares plunge to six-month low after Goldman Sachs gives 'sell' call, downgrades target price

Shares of Ola Electric Mobility dropped over 7 percent to a six-month low at Rs 29.53 on the NSE on Friday, October 23, after global investment bank Goldman Sachs downgraded its stock recommendation to 'Sell' from 'Neutral' earlier and cut its target price to Rs 23 per share from Rs 39.28. This implies a downside of 24 percent from current levels. Ola Electric share price today At the time of writing the report at around 1.15 pm, the shares of pure-play electric vehicle major traded 7.45 percent lower at Rs 29.56 on the NSE. Ola Electric share price history The stock has declined almost 15.42 percent in the past one week while it has fallen 28.06 percent over the last one month. On year-to-date basis, the Ola Electric shares have fallen 19.60 percent. Ola Electric share price target: Why Goldman Sachs has cut target and gave 'Sell' Goldman Sachs cut Ola Electric's gave 'Sell' call and cut the share price target to Rs 23, citing a more challenging path to free cash flow, elevated interest costs, significant capital expenditure requirements and a prolonged period of operating losses. According to Goldman Sachs, the company would need to achieve 3.6 times to 7.1 times higher topline than FY26 levels over FY28 to FY30 in order to cover its current capital expenditure and interest servicing requirements. This represents a significant acceleration compared with its performance between FY24 and FY26, when revenue was 55 percent lower in FY26 than in FY24. Goldman Sachs has cut its revenue estimates for Ola Electric for FY27 to FY29 by up to 10 percent, reflecting the increasingly challenging market share environment for the company compared with peers in the two-wheeler industry. The brokerage's revised estimates underscore concerns about the company's ability to scale its business sufficiently while improving operating performance and managing its funding requirements. The brokerage expects Ola Electric's operational losses will make it more challenging to free cash flow given relatively high interest cost and capex needs of the cell and E2W business. It also flagged potential operational challenges in the battery-cell business following the recent departure of its business head. A recovery in the electric two-wheeler business after a shift towards a dealer-led sales and service model could help improve brand sentiment, Goldman Sachs said. Faster customer wins and improved profitability in the battery-cell business will also help the company, the brokerage said. Earlier this month, Ola Electric finalised the terms of its Rs 1,000-crore rights issue, setting the price at Rs 27 per equity share, a 26 percent discount below the current market value. The company will issue 37.03 crore partly paid-up shares under the offer. The rights issue, which opened on Thursday, will close on October 30, was first approved by the board on September 28, when the company filed its draft letter of offer. The company had earlier received an enablement to raise up to Rs 1,500 crore, of which Rs 780 crore was raised through a QIP in June 2026. Shareholders can sell or transfer their rights entitlement in the market until October 26. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.