Ola Electric shares fall 7% despite narrowing of Q3 loss; here’s what Emkay Global says

Ola Electric Mobility Ltd shares declined 7% in early deals on Monday despite the firm narrowing loss in Q3. However, revenue more than halved, weakening sentiment around the stock today. Additionally, brokerage Emkay Global downgraded rating for Ola Electric stock and cut its target price by 60%.

With a ‘sell’ rating against the previous ‘buy’ recommendation, the new price target stands at Rs 20 apiece from Rs 50 per share.

Ola Electric shares fell 7% to Rs 28.73 in the current session. Market cap of the firm slipped to Rs 12,787 crore. Total 49.66 lakh shares of the firm changed hands amounting to a turnover of Rs 14.51 crore. 

The firm reported a loss of Rs 490 crore in the third quarter compared to a loss of Rs 560 crore in the previous one.

However, revenue declined 55% to Rs 470 crore in Q3 from the rS 1045 crore in the previous year and fell 32% sequentially.

Ola Electric’s earnings before interest, tax, depreciation and amortisation (EBITDA) loss came at Rs 271 crore. The EBITDA narrowed annually but increased sequentially.

Emkay Global said Ola clocked a weak Q3. Hhowever, its underlying electric two-wheeler theme is strong.

The industry is witnessing a healthy growth due to recent GST cuts. However, Ola’s volume declined to 32,000 units in the third quarter, seeing consistent losses, according to the brokerage.