Bengaluru, February 20: Shares of Ola Electric Mobility Ltd. experienced a decline on Friday following reports that the electric vehicle manufacturer plans to significantly reduce its physical retail footprint by the end of March. The company reportedly intends to cut its number of stores to 550, marking a sharp reversal from its aggressive expansion strategy implemented only months ago.

The downward movement in share price reflects investor caution as the Bengaluru-based company navigates a period of internal restructuring and external market pressures. This development follows a period where Chief Executive Officer Bhavish Aggarwal had pushed for a rapid increase in the firm's physical presence across India to boost sales and service capabilities. Bhavish Aggarwal Faces Arrest? Bailable Warrant Issued Against Ola CEO, Know Why.

Reversal of Rapid Expansion Strategy

The reported plan to scale back to 550 stores comes just over a year after Ola Electric aggressively expanded its network. As of December 2, 2024, the company operated 800 company-owned stores. Within a 19-day window in December, the company claimed to have opened over 3,200 new co-located sales and service centres to reach a target of 4,000 outlets.

This sudden contraction suggests a shift in the company's operational strategy, possibly moving away from high overhead physical locations. Analysts suggest that negative operating leverage during the third quarter, where performance fell below market estimates, may be a primary driver behind the decision to streamline the retail network.

Brokerage Downgrade and Market Pressures

Earlier this week, brokerage firm Citi downgraded Ola Electric to a 'sell' rating from 'buy', significantly slashing its target price from 55 to 27. The brokerage cited several factors for the downgrade, including slower-than-expected electric vehicle penetration in India’s two-wheeler segment.

Citi analysts noted that potential GST cuts on internal combustion engine vehicles have narrowed the price gap, slowing the pace of electrification. Furthermore, the company has faced market share losses attributed to persistent service-related challenges and a decline in customer perception amid intense competition from legacy manufacturers and new entrants.

Legal Developments and Stock Performance

The company is also contending with legal hurdles, as the Bombay High Court at Goa recently stayed an arrest warrant issued against Bhavish Aggarwal. The warrant had been issued by the District Consumer Commission of South Goa after the CEO failed to appear regarding a consumer complaint involving a faulty Ola S1 Pro Second Gen scooter. Bhavish Aggarwal and Ola Senior Executive Booked for Abetment to Suicide After Employee’s Death in Bengaluru

The complainant had sought a refund of INR 147,000 along with INR 50,000 for harassment. On the stock exchange, Ola Electric shares were trading down 2 per cent at INR 26.97 during early Friday sessions. The stock has seen a significant correction, declining 17 per cent over the past month and 49 per cent over the last six months.

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(The above story first appeared on LatestLY on Feb 20, 2026 01:15 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).