Ola Electric Shares Sink Despite Improved Q4 Losses, Revenue Miss Weighs

Shares of Ola Electric fell nearly 6% on Thursday despite the company reporting narrower quarterly losses, as investors reacted negatively to a sharp decline in revenue and cautious commentary around growth and profitability.

The stock dropped 5.65% on the NSE and touched an intraday low of ₹34.83 after opening at ₹35.63 against the previous close of ₹36.96. On a year-to-date basis, Ola Electric shares are down more than 6%, while the stock has declined around 31% over the last one year.

The weak market reaction came even though the electric two-wheeler maker significantly reduced losses during the March quarter. The company reported a consolidated net loss of ₹500 crore for Q4 FY26 compared with ₹870 crore in the same quarter a year ago.

However, revenue from operations dropped sharply by 57% year-on-year to ₹265 crore from ₹611 crore, reflecting pressure on volumes and broader operating challenges.

Margins Improve, Cash Flow Turns Positive

Ola Electric reported an EBITDA loss of ₹281 crore, improving from ₹630 crore a year ago. Gross margins also improved significantly to 38.5% during the quarter, compared with 34.3% in Q3 FY26 and 13.7% in Q4 FY25.

The company said the margin expansion reflected stronger operational efficiency and industry-leading profitability metrics.

A key milestone for the company was its first operating cash flow-positive quarter. Ola Electric reported operating cash flow of ₹91 crore during Q4, supported by production-linked incentive benefits, stronger gross margins, lower operating expenses and improved working capital management.

Its Auto business generated operating cash flow of ₹213 crore and free cash flow of ₹173 crore during the quarter.

However, investments continue in its battery cell business as the company accelerates expansion of its Gigafactory and energy storage ecosystem.

Brokerages Remain Cautious

Despite revising target prices upward, major brokerages maintained negative ratings on the stock. Citi retained a "Sell" rating and increased its target price to ₹26 from ₹22. HSBC maintained a "Reduce" call and cut its target to ₹33 from ₹45.

Meanwhile, Emkay Global retained its "Sell" rating and raised its target price to ₹25 from ₹20. The revised targets still indicate meaningful downside from current levels.

Emkay said Ola's revenue declined 57% year-on-year due to a 61% fall in volumes, while noting that the company’s market share gains and volume improvements may be partly driven by temporary factors.

The brokerage said stronger electric two-wheeler demand had supported the broader sector, but increasing competition from established players and scaling efforts by rivals could make Ola's recovery process lengthy.

Ola Electric also warned that gross margins may weaken during the first half of FY27 because of rising commodity costs and pricing actions aimed at supporting growth amid geopolitical uncertainty.

Analysts said while the broader electric two-wheeler market continues to see healthy long-term growth, concerns remain around Ola's ability to sustain market share gains and improve execution as competition intensifies.