The share price of Ola Electric Mobility fell sharply in today’s trading, dropping nearly 7% and hitting a record low of Rs 28.81. In addition to this, it is the first time the stock has traded below Rs 30. The fall came after the company released its October–December quarter results for FY26.
The brokerage house, Emkay downgraded the stock to to ‘Sell’ from ‘Buy’, with a target price of Rs 20. This implies a potential 35% downside from current levels.
Ola Q3 revenue declines sharply
Ola Electric reported consolidated revenue of Rs 470 crore for Q3 FY26, down 55% from Rs 1,045 crore in the same quarter last year. Despite the drop in revenue, net losses narrowed slightly to Rs 487 crore, compared with Rs 564 crore a year ago.
As per Emkay, “Ola logged a weak Q3, with revenue down 55% year-on-year on a 61% year-on-year volume drop.” The brokerage noted that gross margin improved 3.4% quarter-on-quarter to 34.3%, supported by production-linked incentive benefits for the Gen3 electric scooters.
Let’s take a look at what the brokerage is saying about this stock –
Emkay on Ola Electric: Profits under pressure
Even though gross margins increased, operating profits are under strain. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin fell to -58% from -29% in the previous quarter.
Emkay in its report noted, “The underlying electric two-wheeler theme is strong; the industry is seeing healthy growth (33%/24% YoY in Jan/Feb 2026), with a revival in penetration following a dip due to recent GST cuts.”
However, Ola’s own sales volume dropped to 32,000 units in Q3 from 125,000 units in Q1, causing a significant market-share loss. The company is now ranked fifth in the segment with 6% market share.
Emkay on Ola Electric: Steps to control costs and improve operations
Ola is taking measures to stabilise the business. The company plans to reduce its store network to 700 locations and lower quarterly operating expenses to Rs 250-300 crore from Rs 430 crore in Q3.
Emkay also noted, “However, we believe that this could be a difficult, long-drawn process, especially amid greater focus from incumbents and scale-up at Ather Energy. Also, the turnaround would necessitate Ola to have a strong cash balance to survive this phase.”
Emkay on Ola Electric: Battery and production updates
The company is completing its capital expenditure phase, with the final stage of the gigafactory expected by March 2026.
Ola has started delivering vehicles with its in-house 4680 “Bharat” battery cells. Current installed battery capacity is about 2.5 gigawatt hours, with a target of 6 gigawatt hours by March 2026. The company plans to expand the use of in-house battery cells across its range to improve costs per unit.
Emkay on Ola Electric: Financial and operational metrics
Ola expects quarterly operating expenses to stabilize, with 85-90% fixed and only 10-15% variable. “Ola’s lower breakeven now stands at about 15,000 units per month. With the current setup, Ola can scale 3-4 times volumes with limited extra costs,” said the brokerage.
Conclusion
Overall, the brokerage house in its report noted, “Upside risk could stem from a strategic stake sale in the battery business, resulting in meaningful cash infusion. We prefer to play the electric two-wheeler theme with Ather Energy, TVS Motor, and Bajaj Auto.”
The brokerage’s downgrade to Sell is related to concerns over falling revenue, declining market share, rising debt, and the time it may take for Ola to stabilize operations.