Stock to Sell: Here's why analysts are bearish on Ola Electric after Q4 results despite operational improvement

Stock to Sell: Shares of Ola Electric Mobility Limited remained under pressure on Thursday, falling over 4 per cent after analysts maintained a cautious stance on the company despite some operational improvement in its March quarter (Q4 FY26) performance.

The stock was trading at Rs 35.33, down Rs 1.63 or 4.41 per cent, at 1:14 PM on May 21.

Analysts cautious despite margin improvement

Brokerages said that while the company has shown improvement in gross margins and operational efficiency, concerns remain around volume recovery, market-share sustainability, and cash conservation.

Analysts at Emkay Global Financial Services noted that Ola Electric’s recovery in volumes and market share remains “monitorable,” especially as competition in the electric two-wheeler segment intensifies.

The EV market in India continues to expand, but analysts believe execution challenges and aggressive competition from legacy players and startups could limit upside visibility for the company in the near term.

Revenue drops sharply in Q4 FY26

Ola Electric Mobility Limited reported a sharp decline in revenue during the March quarter, with revenue from operations falling 56.6 per cent year-on-year to Rs 265 crore.

The decline was primarily due to lower vehicle deliveries, which fell 61 per cent YoY, along with weaker average selling prices that declined around 10 per cent sequentially.

Despite the weak top line, gross margin improved to 38.5 per cent, expanding by 424 basis points sequentially, aided partly by production-linked incentive (PLI) accruals tied to the Gen3 platform.

However, operating losses remained elevated. EBITDAM loss widened to 106 per cent, compared to 58 per cent in the previous quarter.

Net loss came in at Rs 496 crore, compared to Rs 870 crore in the year-ago quarter and Rs 487 crore in Q3 FY26.

HSBC, Citi retain negative stance

HSBC maintained its “Reduce” rating on the stock and cut the target price to Rs 33 from Rs 45.

The brokerage said delays in battery cell production scaling have weakened a key competitive advantage initially expected from Ola Electric. It also lowered estimates amid weak volume growth trends.

Citi maintained a “Sell” rating while raising its target price slightly to Rs 26 from Rs 22.

According to Citi, the company’s Q4 revenue was below estimates due to lower average selling prices and accounting changes related to extended warranties. While the brokerage acknowledged strong gross margin improvement, it said sustained volume growth remains critical before turning constructive on the stock.

The brokerage also noted that nearly 90 per cent of Ola Electric’s operating expenses are fixed, meaning profitability could remain under pressure if sales volumes do not recover meaningfully.

Company guides for recovery in FY27

Management remains optimistic about EV demand trends, particularly amid rising fuel prices, and expects market share improvement through stronger service offerings and cost-control measures.

For Q1 FY27, the company guided for 40,000–45,000 orders and revenue between Rs 500 crore and Rs 550 crore.

The company also highlighted ongoing efforts toward cost reduction and said the automotive business generated positive free cash flow during Q4 FY26.

Despite the recent decline, the stock remains significantly above its 52-week low of Rs 21.21, touched in March 2026.