Ola Electric Mobility Ltd. SHARES PLUNGE

Shares of Ola Electric Mobility fell more than 7%, hitting a six-month low. The decline came after global investment bank Goldman Sachs downgraded its recommendation on the stock to ‘Sell’ from ‘Neutral’ and slashed its target price to Rs 23 from Rs 39.28. The revised target implies a potential downside of around 24% from current levels. The stock has come under significant pressure, declining 15.42% over the past week and 28.06% in the last month. On a year-to-date basis, Ola Electric shares have dropped 19.60%. Experts highlighted the scale of growth required for the company to meet its capital expenditure and interest servicing obligations. Ola Electric would need to generate revenue 3.6 higher than its FY26. This would represent a sharp acceleration from its recent performance, with revenue in FY26 having fallen 55% compared with FY24. Analyst also flagged potential operational challenges in the company's battery-cell business following the recent departure of its business head. However, a recovery in the electric two-wheeler business, supported by its transition to a dealer-led sales and service model, could help restore brand sentiment. Faster customer acquisition and improved profitability in the battery-cell business would be key to strengthening the company's financial performance. Earlier this month, Ola Electric finalised the terms of its Rs 1,000-crore rights issue at Rs 27 per equity share, representing a 26% discount to the prevailing market price at the time of the announcement. The company plans to issue 37.03 crore partly paid-up shares under the offering. The rights issue opened on Thursday and is scheduled to close on October 30. The company's board initially approved the fundraising plan on September 28, when it filed the draft letter of offer.