On July 14, Ola Electric, a maker of electric two-wheelers, reported a larger consolidated net loss of INR 428 crore for the first quarter of the fiscal year 2025–2026 (Q1 FY26). In the same time frame last year, the company managed by Bhavish Aggarwal reported a net loss of INR 347 crore.
Nonetheless, the loss decreased from INR 870 crore reported at the end of the March quarter of FY25 on a quarter-on-quarter (QoQ) basis. As a result of fierce competition hurting sales, the company’s consolidated revenue from operations fell 49.6% year over year (YoY) to INR 828 crore in the June quarter.
In the same time of the previous fiscal year, Ola Electric generated INR 1,644 crore in revenue. However, the performance got better one after the other. In the March 2025 quarter, the company reported INR 611 crore in revenue.
Major Factors Hampering the Growth
Due to fierce rivalry from other companies, including Bajaj Auto, TVS Motor, and Ather Energy, sales drastically decreased throughout the reviewed period.
In the June quarter of FY26, the company delivered 68,192 units, compared to 1,25,198 units during the same period the previous year. Operating-wise, Ola Electric’s EBITDA loss for Q1 FY26 was INR 237 crore, which was more than the INR 205 crore reported in Q1 FY25.
The margins were -28.6% as opposed to -12.5%. June was the first EBITDA-positive month for the car industry, and the auto segment’s EBITDA improved significantly to -11.6% from -90.6% in Q4 FY25. In contrast, the gross margin increased YoY from 18.4% to 25.8%.
Ola’s Letter to its Stakeholders
In a letter to shareholders, Ola stated that because of its emphasis on vertical integration and in-house technology, Gen 3 BOM reduction has led to the company’s greatest GM performance to date. This trend is expected to continue over the next quarters.
According to the company’s FY26 exit plan, its GM should be between 35 and 40% with PLI incentives, or between INR 40,000 and INR 45,000 per vehicle. Project Lakshya, the company’s cost-optimisation project, has reduced monthly auto opex from INR 178 crore to INR 105 crore, resulting in considerable operating efficiency.
The company stated in a press release following the earnings announcement that consolidated opex currently stands at INR 150 crore per month and that a further reduction to about INR 130 crore per month is targeted through FY26.
Ola anticipates making between INR 4200 and INR 4700 crore from the sale of 325,000 to 375,000 automobiles.
The company also stated that it expects full-year auto EBITDA of above 5% and that gross margin would increase to 35% to 40% with Production Linked Incentive (PLI) benefits starting in Q2 for the Gen 3 product range. From Q2 onwards, Ola stated, “The company also expects the auto business to remain EBITDA positive.”
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