Ola Electric shares fall following Goldman Sachs downgrade
Shares of Ola Electric dropped more than 7% on Wednesday after Goldman Sachs issued a sell rating and lowered its price target for the EV manufacturer.
Ola Electric shares hit an intraday low of 29 rupees on the BSE on Wednesday, representing a 7.6% decline following a bearish outlook from Goldman Sachs. The brokerage firm downgraded the electric vehicle maker to a “sell” rating and slashed its price target to 23 rupees.
The downgrade is attributed to concerns over the company’s ability to achieve positive cash flow, citing high capital expenditure requirements for its battery and electric two-wheeler businesses, alongside mounting interest costs. Goldman Sachs also revised its revenue growth projections downward by as much as 10% for the 2027-2029 fiscal period.
The market reaction coincided with the company’s launch of a 1 billion rupee rights issue. Ola Electric plans to utilize these proceeds primarily for debt repayment and funding organic business expansion. Founder Bhavish Aggarwal has pledged a 4.32% stake in the company to participate in the capital raise.
The stock has faced significant pressure, falling over 20% in the last month. As of Wednesday afternoon, the company's market capitalization stood at approximately 14.9 billion rupees ($1.57 billion), with investors awaiting the release of the second-quarter financial results.