Goldman Sachs Cuts Ola Electric Target Price, Sees 23% Downside

Ola Electric shares could face further pressure after global brokerage firm Goldman Sachs lowered its price target for the electric two-wheeler maker to ₹23 from ₹39.28. The revised target suggests a potential downside of around 23% from the stock’s previous closing price of ₹29.90. The brokerage has turned more cautious about the company’s prospects, citing concerns over cash flow, future funding requirements and operational challenges. The downgrade comes at a time when the company’s shares are already under pressure and it is working to raise funds through a rights issue.

Goldman Sachs believes Ola Electric could find it difficult to return to a stronger financial position in the near future. According to the brokerage, the company faces several challenges that could slow its recovery, particularly its ability to manage expenses and generate sufficient cash from its business operations. Cash flow is an important measure of a company’s financial health because it shows how much money is coming in and going out of the business. If a company continues to spend more cash than it generates, it may need additional funding to support its operations and growth plans.

One of the key concerns highlighted by Goldman Sachs is the difficulty Ola Electric may face in achieving positive free cash flow. Free cash flow is the money left after a company pays for its regular operations and capital expenditure, which includes spending on facilities, equipment and other long-term assets. The brokerage expects this to remain a challenge because of the company’s high interest expenses and substantial capital expenditure requirements. These costs could limit the cash available to support its business and make it harder to improve its financial position.

The revised price target also reflects the pressure on Ola Electric’s stock in the market. The shares closed at ₹29.90 in the previous trading session, while the stock reportedly fell by nearly 7% on Friday. Goldman Sachs’ new target of ₹23 is significantly below that closing level, indicating that the brokerage expects the stock to face further downside. However, a brokerage price target is an estimate based on its analysis, not a guarantee of how a share will perform in the market.

Ola Electric shares have already recorded substantial losses over different periods. The stock has fallen by around 28% in the past month and approximately 44% over the past year. Its 52-week high stands at ₹53.47, while its 52-week low is ₹20.83. These figures show the wide range within which the stock has traded over the past year and underline the volatility investors have experienced. The latest downgrade adds another concern for shareholders who are watching the company’s financial performance and efforts to stabilise its business.

Goldman Sachs has also reduced its revenue estimates for Ola Electric for the financial years 2027 to 2029 by up to 10%. The brokerage attributed the revision to intense competition for market share and the possibility that operating losses could continue for an extended period. Revenue refers to the money a company earns from selling its products and services before expenses are deducted. Lower revenue expectations suggest that the brokerage is less confident about the pace at which Ola Electric can expand its business over the coming years.

The company’s recent revenue performance is another factor behind these concerns. According to the information cited in the brokerage assessment, Ola Electric’s revenue in financial year 2026 was 55% lower than its revenue in financial year 2024. This decline raises questions about the company’s ability to return to a stronger growth trajectory. With competition remaining intense in the electric two-wheeler market, increasing sales and improving its financial performance could prove challenging. The brokerage’s assessment suggests that a recovery may take longer than previously expected, particularly if operating losses and funding requirements remain high.

Meanwhile, Ola Electric has launched a rights issue as part of its fundraising efforts. The company’s board has set the issue price at ₹27 per share. A rights issue allows an existing company to raise money by offering additional shares to eligible shareholders, generally in proportion to their existing holdings. The offer is scheduled to close on October 30, while shareholders can sell or transfer their rights entitlements in the market until October 26. These entitlements represent the rights granted to eligible shareholders to participate in the issue.

Ola Electric had previously received approval to raise up to ₹1,500 crore. Of this amount, the company raised ₹780 crore through a qualified institutional placement (QIP) in June. A QIP is a fundraising method through which a listed company sells securities to eligible institutional investors. On September 28, the company’s board approved the rights issue and filed the draft offer document on the same day.

The fundraising exercise comes as the company faces concerns over cash generation, revenue growth and continued operating losses. Goldman Sachs’ lower price target reflects these challenges and its expectations for the company’s financial outlook. Investors will be watching how the rights issue progresses and whether Ola Electric can improve its revenue performance, manage its expenses and move closer to generating positive free cash flow. The stock’s future performance will depend on several factors, and the brokerage’s revised target remains an assessment rather than a certain outcome.

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