Synopsis:
Ola Electric projects a 35–40% gross margin, positive cash flow, and up to 3.75 lakh vehicle sales in FY26; the stock surged 17.7%.
A leading electric vehicle manufacturer known for its electric scooters and mobility solutions saw its stock surge 17% following an optimistic financial outlook. The company projected significantly higher future profit margins per vehicle and expects substantial per-unit manufacturing incentives from a government scheme to boost its bottom line in the coming years.
Ola Electric Mobility Limited’s stock, with a market capitalisation of Rs. 20,439 crores, rose to Rs. 46.85, hitting a high of up to 17.7 percent from its previous closing price of Rs. 39.80. However, the stock over the past year has given a negative return of 49.5 percent.
Company Guidance
- FY26 Margin Goal: Ola Electric aims to achieve a gross margin of 35–40% by the end of FY26 (March 2026). In simple terms, this means it expects to retain 35–40% of the selling price of each vehicle as profit before deducting other business expenses.
- PLI Scheme Impact: The government’s Production-Linked Incentive (PLI) scheme is expected to boost Ola’s profit by Rs 40,000 to Rs 45,000 per vehicle, likely through subsidies or manufacturing incentives.
- Cash Flow Outlook: The company anticipates that its auto division will start generating positive operating cash flow later this year.
- Lakshya Cost Program: Ola’s cost-cutting initiative, Lakshya, has successfully reduced auto-related operating expenses from Rs 178 crore per month in Q4 FY26 to Rs 105 crore per month.
- Future Expense Forecast: Even if vehicle production doubles, Ola expects its overall monthly operating expenses to stay near Rs 150 crore by the end of FY26.
- 4680 Cell Production: Ola has begun producing its own 4680 battery cells, which will start being used in vehicles from this Navratri. The shift from externally sourced cells to in-house 4680 cells will happen gradually throughout FY26, starting this quarter. By the end of FY26, Ola expects to fully utilise 1.4 GWh capacity and continue ramping up to 5 GWh usage by FY27.
- Battery Plant Investment: The total budget for the 5 GWh battery plant is Rs 2,800 crore. An SBI-led consortium is backing the project, and Ola has already invested Rs 1,500 crore. The full installation is expected to be completed by the end of FY26, with most of the remaining capital spending planned for this year and some spillover into FY27.
- Vehicle & Revenue Guidance: For FY26, Ola projects vehicle sales between 3.25 lakh and 3.75 lakh units, with estimated revenue ranging from Rs 4,200 crore to Rs 4,700 crore.
Q1 FY26 Financial Results
In Q1 FY26, the company reported a revenue of Rs. 828 crore, showing a 35.5% growth QoQ from Rs. 611 crore in Q4 FY26. However, it reflects a 49.6% decline YoY compared to Rs. 1,644 crore in Q1 FY24, indicating weaker sales performance on an annual basis.
Despite continued losses, the company posted a narrowed net loss of Rs. 428 crore in Q1 FY26. This is a 50.8% improvement QoQ compared to a loss of Rs. 870 crore in Q4 FY26. On a YoY basis, the loss widened by 23% from Rs. 347 crore in Q1 FY24.
Written By Fazal Ul Vahab C H
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