Ola Electric Mobility Limited — Q1 FY26 earnings call

Call held 14 Jul 2025

Management summary

Ola Electric reported a transformative Q1 FY26, marked by a strategic shift towards balanced profitable growth. The Auto segment achieved EBITDA positivity in June, driven by strong gross margins from the Gen 3 platform and OpEx reductions. The company is also making significant progress in vertical integration, with the Cell Gigafactory ramping up and 4680 cell vehicles expected by Navratri. While the EV market is in a consolidation phase, Ola Electric aims for operational and free cash flow positivity in its Auto business by FY26 end.

Highlights

  • Auto segment achieved EBITDA positive for the month of June, a first for the company.

  • Gross margins were strong, with 26% overall and 22%+ without incentives, driven by Gen 3 platform and OpEx reductions.

  • Operational cash flows were almost neutral this quarter due to structural improvements in working capital and inventory management.

  • The Gen 3 product, accounting for almost 80% of overall sales, demonstrated improved performance, gross margins, and quality.

  • The Cell Gigafactory is ramping up, with 4680 cell vehicles expected to be delivered to customers by Navratri.

Concerns

  • The EV two-wheeler industry is in a consolidation phase, leading to a reset in penetration expectations after initial hyper-growth.

  • Macro risks related to rare-earth magnets and ABS mandate require internal solutions and technology development.

  • A maximum penalty of ₹100 crores is being accrued quarterly in the P&L for potential changes in PLI scheme timelines.

Key financials

  1. Volume 68,000 units
  2. ASP ₹1,21,000
  3. Motorcycle ASP ₹1,15,000
  4. Gross Profit per Vehicle ₹31,000
  5. Gross Margin 26%
  6. Gross Margin (ex-incentives) 22%
  7. Cost per Vehicle ₹90,000

What they filed

Q1 FY27: revenue down 45.0%, net profit up 21.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,214 1,045 611 828 690 −43%470 −55%265 −57%455 −45%
EBITDA-379 -460 -695 -237 -203 +46%-271 +41%-281 +60%-165 +30%
Net profit-495 -564 -870 -428 -418 +16%-487 +14%-500 +43%-336 +21%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹1,000 Cr existing term loan and SBI consortium term loan
    • Cell business (5 GWh Gigafactory completion) ₹1,200 Cr
    For our Cell business, there will be CapEx. We already have done the CapEx of 1.4 GWh and we will be completing the 5 GWh capacity that we have planned for, for which capital is already lined up through a term loan facility with the SBI consortium. Now, after that, most of the payments of that will also happen in this year and some will flow into next year. We don't foresee the need to expand Cell Gigafactory capacity beyond 5 GWh for the next 3 to 4 years. ... We expect about 400-500 crores of free cash flow requirement for the remainder course of this year, at which point free cash flow should turn positive. For our Cell business, there will be a CapEx of about a 1,000 odd crores in this year and some more in next year. And 70% of that or roughly two-thirds, 70% of that, is funded through the existing term loan that we have and the remainder through equity. ... The full budget for our 5 GW plant is 2,800 crores, including both the CapEx as well as some pre-operative costs. Now, out of this, we have already invested about 1,500 crores, and the remaining 1,200 odd crores will go in over the course of this year and some into next year.
  • Debt Gross ₹2,000 Cr
    • Refinance Refinancing corporate debt taken before IPO with fresh NCDs
    excluding short-term debt, which is largely working capital, Ankur, to about 2,000 crores. Yeah, 2000 crores and it's getting paid down over the next two years, all the corporate debt is getting paid down. Term loans will continue long.
  • Liquidity Cash ₹3,200 Cr Cash on balance sheet as of end of quarter.
    We have about 3,200 crores on the balance sheet as of end of quarter.

Guidance & targets

Profitability

  • Auto business operational cash flow Profitability · near term · High confidence cash positive
    In the near term, we expect the Auto business to be operationally cash positive

    — Mr. Bhavish Aggarwal

  • Auto business free cash flow Profitability · by end of FY26 · High confidence free cash positive
    and also by the end of FY26, to be free cash positive.

    — Mr. Bhavish Aggarwal

  • Cell business free cash flow break-even Profitability · at 5 GWh · High confidence break even
    In terms of unit economics, the Cell business at a free cash flow level breaks even for us at 5 GWh.

    — Mr. Bhavish Aggarwal

Volume

  • Total vehicle sales Volume · FY26 · High confidence 3.25 lakh to 3.75 lakh
    For the whole year of FY26, we are targeting to get to around 3.25 lakh to 3.75 lakh vehicle sales driven by the festive season coming up, and our plans on our Gen 3 and our bike products through the course of this year.

    — Mr. Bhavish Aggarwal

  • Bike volume contribution to FY26 target Volume · FY26 · Medium confidence 15-20%
    So, Ajox, today, we're not sharing that specific guidance, but we do expect 15-20% should be a reasonable target for bikes.

    — Mr. Bhavish Aggarwal

Capacity

  • Cell Gigafactory capacity Capacity · this year (FY26) · High confidence 5 GWh

    Previously 6.4 GWh → 5 GWh

    For our Cell business, there will be CapEx. We already have done the CapEx of 1.4 GWh and we will be completing the 5 GWh capacity that we have planned for, for which capital is already lined up through a term loan facility with the SBI consortium.

    — Mr. Bhavish Aggarwal

  • Cell production ramp-up Capacity · starting this quarter, gradually · High confidence 1.4 GWh then 5 GWh
    Through this year now, starting this quarter, we are going to keep ramping up gradually the cell production to grow into the 1.4 first, and then grow into the 5 GWh after that.

    — Mr. Bhavish Aggarwal

Product Launch

  • Rare-earth free motor delivery Product Launch · next quarter · High confidence delivered to customers
    And we've been working on these technologies for the last year or two. Some of you who've visited our factories would have even remembered seeing this on display at the time of our road shows. And on rare-earths, we actually have a dual strategy of managing through alternate suppliers for magnets, and also coming out with a rare-earth free motor, which is in the next quarter; it will be delivered to customers in the next quarter.

    — Mr. Bhavish Aggarwal

Operating Expenses

  • OpEx reduction Operating Expenses · next quarter or two quarters · High confidence 10-15% reduction
    Over the next quarter or two quarters, we should be further able to reduce another 10 to 15% of OpEx at a similar volume levels.

    — Mr. Bhavish Aggarwal

Product Penetration

  • MoveOS+ penetration rate Product Penetration · through this quarter · High confidence 80-85%
    And the penetration rates of that is now, actually on a run rate basis, almost 70%. And we expect through this quarter for that to rise to 80-85%.

    — Mr. Bhavish Aggarwal

What to watch in Q2 FY26

Rare-earth free motor delivery

Next quarter
Current Under development
Target Delivered to customers

Why it matters

Demonstrates technological innovation and reduces dependency on rare-earth magnets, addressing a key macro risk.

So on rare-earths, we actually have a dual strategy of managing through alternate suppliers for magnets, and also coming out with a rare-earth free motor, which is in the next quarter; it will be delivered to customers in the next quarter.

Risks & concerns

  • Macro risks in the industry (rare-earth magnets, ABS mandate)

    medium

    Company has dual strategy for magnets and will launch rare-earth free motor next quarter; ready with in-house ABS solution.

    Management acknowledged

  • EV penetration reset / Industry consolidation

    medium

    Industry is in a consolidation phase after hyper-growth, with EV growth slowing from aggressive to 20-25% annually, influenced by reduced government incentives and early adopter saturation.

    Management acknowledged

  • PLI scheme penalty

    low

    Maximum of ₹100 crores penalty is being accrued quarterly in P&L for potential changes in PLI timelines.

    Management acknowledged

Q&A highlights

7 direct
Q1 FY26 Volume Split (Scooters vs. Motorcycles) and Motorcycle ASP Direct
Chandru, the split is still largely scooters because motorcycle deliveries only started happening early June. So almost all of it is still scooters. The motorcycle deliveries are ramping up in June, and now going forward also. In terms of ASP, the Roadster X and X+ ASPs are broadly in the range of the S1X and X+ ASPs, maybe 5% higher, 5 to 10% higher. So it'll be one level lower than the S1 Pro and Pro+, but in that S1X and X+ range. So in terms of it looks like against the Rs. 1.2 lakh, it might be Rs. 1.15 lakh as an ASP.

Clarifies the initial mix of sales for the newly launched motorcycle segment and its pricing relative to scooters, providing insight into early market acceptance.

Asked by Mr. Chandramouli Muthiah (Goldman Sachs)

ABS Norms and Additional Cost Direct
See for us, let's say for industry when they do ABS, anywhere between Rs. 3,000 to Rs. 5,000 they incur in terms of BOM cost, depending on what kind of ABS etc. For us, it'll be a small fraction, it'll be a fraction of that, because these ABS products as you can imagine are high margin products for whoever is selling them, Bosch or Conti or whichever supplier is selling them. And we have our own engineering capability. In fact, the way we have built the ABS is that our electronics are all combined into the same central electronics. So a lot of software defined functionality. So in that sense, the content itself is lower in our ABS, and obviously, we saved all the cross margins.

Details Ola Electric's competitive advantage in managing ABS costs due to in-house technology and vertical integration, which is a key regulatory requirement.

Asked by Mr. Chandramouli Muthiah (Goldman Sachs)

Gen 3 Gross Margin Realization and OpEx Sustainability Direct
Yeah. Some of the gross margins are still to be realized, Gunjan. There is an incremental goodness on some of the Gen 3 margins that will come through this financial year. And on top of that, 25% gross margin this quarter didn't have any PLI. So PLI, whatever you guys model, will also come on top. ... Yes, OpEx is now stable. In fact, incrementally, there will be some more opportunities for efficiency and productivity through the year. But 100 odd crores of Auto OpEx and 150 odd crores of total consolidated OpEx right now. Over the next quarter or two quarters, we should be further able to reduce another 10 to 15% of OpEx at a similar volume levels.

Provides clarity on the future trajectory of gross margins for Gen 3 products, including the impact of PLI, and outlines plans for further OpEx reduction, indicating continued focus on profitability.

Asked by Ms. Gunjan Prithyani (Bank of America)

Gigafactory PLI Incentives and Strategic Rationale Direct
Yes. Yeah. So, Rishi, the reason to set up a Gigafactory is strategic and long term. Our reason to set it up was never PLI. In fact, we actually started our Gigafactory before the PLI scheme came in. ... First reason is long term strategic business continuity and control of your supply chains. ... Second, cell is not a commodity, Rishi; cell is a technology component. ... And our technology leadership is actually now well established. ... So those are the three reasons it makes long term strategic sense to do the cell in-house, in terms of capital returns purely.

Explains the fundamental strategic drivers behind Ola Electric's Gigafactory investment, emphasizing long-term control, technology leadership, and cost benefits beyond PLI incentives.

Asked by Mr. Rishi Vora (Kotak Securities)

Cell Business Profitability and Differentiation Direct
See Vipul, firstly, small correction there, it's GWh (gigawatt hour), not GW (gigawatt). ... So on the cell... See, firstly, I would like all of you to look at us as a vertically integrated cell manufacturer, not a standalone cell manufacturer. That makes a world of difference in business model and cost structures. ... Second, since I'm vertically integrated, I have a large anchor customer, I have less SG&A costs, as well as an immediate benefit on springing up my production basis, my internal customer. ... And good cell companies have mid-teens EBITDA margins. Our cost structure will actually, over time, get better than them on OpEx. On gross margins and BOM cost, large cell companies will have an advantage over us till we become large enough. But there's also an arbitrage on duties, etc. on bringing these cells into India. So all of that balances out into a balanced business model opportunity for us.

Clarifies Ola Electric's unique position as a vertically integrated cell manufacturer, highlighting cost advantages, lower SG&A, and the strategic benefits of in-house cell production compared to standalone cell companies.

Asked by Mr. Vipul Agrawal (HSBC)

Vahan Registration vs. Delivery Numbers and Market Share Partial
So firstly, last quarter, we had a lag on deliveries and higher Vahan. Hence, our revenue was lower, Vahan was higher. That delta is almost the same delta in the opposite direction this quarter. So we have a slightly higher delivery number and a slightly lower Vahan number than delivery number. So that's because of the covering up of last quarter in this quarter. ... Market share, you can say is it a function of registrations or is it a function of deliveries? Both are different definitions. So I will leave the market share question out of this. In the end, roughly, our market share is in the high teens or 20% thereabouts right now.

Addresses discrepancies between reported delivery numbers and Vahan registrations, explaining the lag effect and providing a qualitative estimate of current market share without giving a precise number.

Asked by Mr. Amyn Pirani (JPMorgan)

EV Penetration Reset and Industry Growth Direct
See, firstly, Gunjan, if you see EV two-wheeler industry growth versus ICE two-wheeler industry growth, EV is still 3x of ICE, right? So, in that sense, ICE is growing at 6-7%, EV is growing at 20% odd, give or take a few here and there. So, EV is still growing very much faster than ICE. It has definitely come down from the absolute aggressive growth in FY23, FY24, and early part of FY25. A couple of reasons for that, firstly, government incentives have also come down. So, that definitely has made manufacturers, as well as some customers think about their choices in terms of pricing as well as in terms of purchase for the customer. Second, also, the early adopters have now largely adopted EVs. The S-curve of the penetration will go through the S-curve. So, there'll be an aggressive growth, then there'll be a consolidation phase, and then there'll be an aggressive growth again.

Provides management's perspective on the current slowdown in EV penetration growth, attributing it to reduced government incentives and the natural S-curve adoption cycle, while still emphasizing EV's faster growth than ICE.

Asked by Ms. Gunjan Prithyani (Bank of America)

Battery as a Service / Removable Battery Plans Direct
No, Udit. We have a product on the removable battery, which is the Gig and the Gig+. But as of now, we have not kicked off the manufacturing of that. We will do that as the market matures.

Clarifies the company's current stance on battery-as-a-service or removable battery offerings, indicating that while they have a product, manufacturing is not yet initiated, suggesting a wait-and-see approach for market maturity.

Asked by Mr. Udit Jaiswal (Participant)

3 min read 7 chapters

Detailed narrative

Q1 FY26 Performance Highlights

Ola Electric reported a transformative Q1 FY26, marked by a strategic shift towards balanced profitable growth. The Auto segment achieved EBITDA positive status for the month of June, a first for the company. This was driven by improved gross margins from the Gen 3 platform and significant OpEx reductions through Project Lakshya. The company also achieved near-neutral operational cash flows for the quarter, reflecting structural improvements.

Strategic Shift and Profitability

Management emphasized a transition from aggressive penetration to profitable growth, consolidating operations in a maturing EV market. Gross margins reached 26% overall, and over 22% without incentives, reflecting strong performance. The cost per vehicle decreased from ₹100,000 to ₹90,000, with gross profit per vehicle at ₹31,000. Further OpEx reductions of 10-15% are targeted over the next one to two quarters, aiming for continued efficiency.

Product and Technology Advancements

The Gen 3 product, which constitutes almost 80% of overall sales, demonstrated improved performance, gross margins, and quality, leading to lower warranty claims. Ola Electric is addressing macro risks like rare-earth magnets by developing a rare-earth free motor, expected next quarter. The company is also ready with its in-house ABS solution, which will further save margins and provide a product differential. Penetration of MoveOS+ software features is currently around 70% and is expected to rise to 80-85% this quarter, contributing to ASP.

Cell Gigafactory and Vertical Integration

The Cell Gigafactory is ramping up production, with 4680 cell vehicles slated for customer delivery by Navratri. The total budget for the 5 GWh plant is ₹2,800 crores, with ₹1,500 crores already invested and the remaining ₹1,200 crores to be spent over this year and next. The cell business is expected to break even at a free cash flow level at 5 GWh, and management aims to ramp up production to 1.4 GWh first, then to 5 GWh.

Capital Allocation and Financial Outlook

The Auto business is expected to become operationally cash positive in the near term and free cash positive by the end of FY26, requiring only ₹400-500 crores of incremental cash. The Cell business will require approximately ₹1,000 crores in CapEx this year, funded by an SBI consortium term loan and existing term loans. The company holds ₹3,200 crores in cash on its balance sheet and plans to refinance corporate debt taken before its IPO with fresh NCDs.

EV Market Dynamics and Penetration

While the EV two-wheeler industry still grows 3x faster than ICE (20% vs 6-7%), it has entered a consolidation phase after aggressive growth. This reset is attributed to reduced government incentives and the transition from early adopters to more cautious middle-segment customers. Management expects the S-curve to play out with a period of consolidation followed by another aggressive growth phase, especially as new products and D2C network expansion mature.

Motorcycle Business Scale-up

Motorcycle deliveries began in early June and are ramping up, with the goal of reaching most stores by Navratri. The ASP for motorcycles (Roadster X and X+) is around ₹115,000, slightly higher than S1X/X+ scooters. Feedback has been overwhelmingly positive, and bikes are expected to contribute 15-20% of the targeted 3.25-3.75 lakh vehicle sales for FY26. The company is taking a calibrated approach to scaling to ensure manufacturing quality and manage warranties.

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