Ola Electric Slides Over 7% After Bearish Call From Goldman Sachs
Shares of electric two-wheeler maker Ola Electric crashed as much as 7.6% to hit an intraday low about ₹29 on…
Ola Electric's shares plummeted by up to 7.6% on October 23 after Goldman Sachs issued a bearish outlook on the electric two-wheeler manufacturer. The brokerage firm downgraded its rating on Ola Electric to "Sell" and revised the stock's price target downwards to ₹23, citing the company's challenges in becoming cash flow positive due to high interest costs and capital expenditure needs.
The downgrade also saw Ola Electric's revenue growth for FY27-29 projected to decrease by up to 10%. The bearish sentiment follows the company's rights issue launch, where Motilal Oswal and Calliope Capital Advisors jointly applied for 2.39 Cr shares, representing a significant portion of the entitlements from two promoter groups, ANI Technologies and Indus Trust.
Bhavish Aggarwal, Ola Electric's founder and CMD, pledged a 4.32% stake to contribute towards the company's proposed rights issue of up to ₹1,000 Cr. The funds raised will primarily be used to reduce debt and support business expansion, with ₹350 Cr allocated to debt repayment and ₹400 Cr earmarked for organic growth in Ola Electric's mobility and energy storage ventures.
Ola Electric has yet to release its Q2 FY27 earnings results, but Q1 FY27 saw a net loss reduction of 22% to ₹336 Cr from ₹428 Cr in the previous year. Operating revenue declined 45% to ₹455 Cr from ₹828 Cr in the same period. The stock has ended in losses for six consecutive sessions and has lost over 20% of its value in the past month.
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