Analysts at top brokerages say sell Ola Electric shares, cut target prices after Q4 results

Ola Electric Mobility continued to face bearish views from global brokerages after its Q4FY26 earnings, with HSBC and Citi maintaining negative ratings on the stock and cutting target prices amid concerns around weak volume growth, execution delays, and profitability sustainability.

HSBC maintained its “Reduce” rating on Ola Electric and cut its target price to ₹33. The brokerage said the company is now focusing on sustainable volume growth and margin expansion following a year-long efficiency improvement programme. While HSBC acknowledged that Ola’s cautious approach towards battery cell production scaling appears prudent, it noted that delays in execution have eroded a key competitive advantage that the company once held.

The brokerage also highlighted concerns around weak volume growth and said it has cut its estimates for the EV maker accordingly.

Citi maintained its “Sell” call on Ola Electric with a target price of ₹26. According to the brokerage, the company’s Q4FY26 performance came in below estimates due to lower average selling prices (ASPs), partly impacted by accounting changes related to extended warranty recognition.

However, Citi acknowledged that Ola Electric’s gross margins remained impressive, even after adjusting for Production Linked Incentive (PLI) benefits. Management commentary around electric vehicle demand was also seen as positive, particularly against the backdrop of rising fuel prices.

The brokerage noted that Ola Electric expects its market share to improve as the company continues enhancing its service network and customer experience. For Q1FY27, management guided for 40,000–45,000 orders and revenue of ₹500–550 crore.

Citi also pointed out that management has intensified its focus on cost reduction and cash flow generation, with the company reporting positive free cash flow for its auto business during Q4FY26.

Despite these positives, the brokerage remained cautious and said it would prefer to see sustained improvement in volumes before turning constructive on the stock. Citi further warned that nearly 90% of Ola Electric’s operating expenses are fixed in nature, which could keep EBITDA under pressure if volume recovery remains weak despite improving gross margins.

Ola Electric recently reported narrowing losses and stronger gross margins for Q4FY26, while management reiterated that service operations have stabilised materially and sales recovery has begun.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice.