Ola Electric Mobility Ltd shares declined more than 3% in early trade on February 17, extending recent losses after global brokerage Citi downgraded the stock to ‘Sell’ from ‘Buy’ and sharply reduced its target price to Rs 27 from Rs 55. As of 9:28 AM IST, the stock was trading near the day’s low of Rs 27.82.
The downgrade comes amid persistent headwinds in India’s electric two-wheeler (2W) segment. Citi noted that EV penetration in the domestic 2W market has been more sluggish than earlier anticipated, with GST cuts on conventional vehicles further slowing the pace of electrification. According to the brokerage, Ola Electric has also ceded market share, impacted by service-related challenges, rising competition, and adverse customer perception.
At 9:28 AM IST, the stock traded between Rs 27.82 and Rs 28.69 during the session. It opened at Rs 28.69 compared to the previous close of Rs 28.83. Notably, the intraday low of Rs 27.82 also marks its 52-week low, while the 52-week high stands at Rs 71.25.
Citi highlighted that the company’s Q3 results came in below estimates, largely due to negative operating leverage. However, the brokerage acknowledged the company’s improving gross margin trends and said that better operating leverage could potentially lift EBITDA over time. Even so, it cautioned that management initiatives to enhance product and service quality may take time to yield visible results.
Another key concern flagged was the large negative cash flow, which could raise investor worries around the balance sheet and net debt levels if not addressed in a timely manner.