Ola Electric Mobility Ltd’s stock jumped 14% in the past two days after its June quarter (Q1FY26) results showed the clearest signs yet of operating discipline. Ola’s auto business was Ebitda positive in June helped by stronger volumes, tighter cost control, and early gains from its vertically integrated setup.
Q1FY26 consolidated revenues rose 35.5% sequentially to ₹828 crore, while deliveries climbed 32.7%. Gross margin rose to 25.8% in Q1FY26 from 13.8% in Q4FY25, leading to an improvement in Ebitda margin to negative 29% from negative 114% in the same period.
Ola expects profitability to sustain and has guided for above 5% FY26 auto segment Ebitda margin after posting negative 11.6% margin in Q1FY26.
FY26 vehicle deliveries are pegged at 3.25 lakh–3.75 lakh units, which could be a tall order. Kotak Institutional Equities is baking in 3.10 lakh units in FY26. Ola projects its gross margin to rise further to 35–40% as PLI-linked savings from its Gen-3 scooters kick in.
It should be noted that Ola’s Q1FY26 volumes declined 46% year-on-year despite the electric vehicle (EV) industry’s two-wheeler volumes growing 7%.
Kotak has cut its FY26-FY28volume assumptions to the tune of 12-16%, given lower growth assumptions for the EV two-wheeler industry and sustained below expected volume offtake performance. “An increase in competitive intensity will continue to weigh on the company’s market share,” said Kotak in a report on 14 July.
Moreover, execution risks persist. Ola’s motorcycle rollout is still in early stages, with Roadster X in 200 stores and a national launch due by Navratri. While the initial response is positive, scale and further demand are untested. The company plans to launch a new product every quarter over the next two years.
Ola plans to spend ₹300 crore over the remaining nine months of FY26, with ₹400–500 crore in free cash flow required to fund the auto business. It expects the auto segment to turn FCF-positive by FY26’s end. For its cell business, Ola will invest around ₹1,000 crore to build a 5 GWh facility, which it expects to break even by FY27.
Engineering bets continue as Ola’s rare-earth-free motors are set to enter production in Q3FY26, with dual-sourced magnets added to reduce supply chain risk.
For now, Ola’s numbers suggest a turning point. But for this rally to evolve into a rerating, the company will need to show consistency on volumes, margins, and execution.HSBC Securities and Capital Markets (India)analysts maintained their ‘hold’ rating and reckon the current valuation reflects all improvements.
