Ola Electric Faces Tough Road Ahead as Citi Warns of Ongoing Challenges

Global broking firm Citigroup (Citi) has turned sharply bearish on Ola Electric, downgrading the stock to “Sell” and slashing its target price by nearly half. The move reflects Citi’s view that the company’s challenges are structural rather than temporary. In its latest note, the broking cut the target price from ₹55 to ₹27, marking a significant shift from its earlier bullish stance.

The downgrade implies a potential downside of about 6% from the stock’s previous closing price of ₹28.83, compared with Citi’s earlier expectation of roughly 90% upside. The broking cited persistent headwinds, particularly around slowing volume growth, as a key reason for the reassessment. Citi said the pace of electric vehicle adoption in India’s two-wheeler segment has been weaker than previously anticipated, weighing on the company’s growth outlook.

According to the note, Ola Electric’s revenue performance has deteriorated sharply, with sales falling from ₹1,644 crore in July 2024 to ₹470 crore in the December quarter of FY26. Citi also flagged that recent GST reductions have paradoxically slowed electrification momentum. The broking added that service-related concerns, rising competition, and weakening customer perception have contributed to the company losing market share.

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While Citi acknowledged that improving gross margins and operating leverage could support future EBITDA performance, it warned that rebuilding customer confidence may take time. The firm also highlighted large negative cash flows as a risk factor that could raise investor concerns about the company’s balance sheet and net debt position, suggesting continued pressure on the stock in the near term.

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