Despite the year-on-year drop in revenue, down 49.6% to Rs 828 crore from Rs 1,644 crore, Ola met its top-line guidance and reported a sequential growth of over 35% from Rs 611 crore in the March quarter. Most notably, the company’s auto segment turned EBITDA positive in June, a first for the EV maker.
Gross margin for the quarter stood at 25.6%, its best so far, even though key models are yet to receive government certification required to unlock PLI-linked incentives. Ola credited the improvement to reduced bill-of-materials costs and efficiencies driven by vertical integration and proprietary technology.
Demand for its Gen 3 scooters, Roadster bikes, and the high-margin MoveOS+ software also contributed to the better-than-expected margin performance.
Costs cut sharply, breakeven in sight
Ola’s cost-cutting programme, Lakshya, helped slash auto operating expenses to Rs 105 crore per month, down from Rs 178 crore in Q3 FY25. Consolidated opex is now around Rs 150 crore monthly, and the company expects to hold this line even if volumes double by the end of FY26.
Total expenses in Q1 fell 42.4% year-on-year to Rs 1,065 crore. As a result, while consolidated EBITDA remained in the red at Rs 237 crore, the margin improved to -28.6%, from -113.9% in the previous quarter. Auto EBITDA narrowed to -11.6%.
Guidance holds firm, cash runway intact
The company reaffirmed its FY26 targets: sales of 3.25–3.75 lakh vehicles and revenue between Rs 4,200 crore and Rs 4,700 crore. Ola said it expects auto EBITDA to remain positive from Q2 onward and rise above 5% for the full year.
Ola projected Rs 300 crore in auto capex for the remainder of FY26 and estimates that Rs 400–500 crore in additional funding will be needed to bridge to free cash flow breakeven by year-end.
For its battery cell business, the 5 GWh installation is on track for completion this year, with 70% of the Rs 1,000 crore investment covered by existing term loans. FCF breakeven for the cell unit is expected by end-FY27.
The company ended June with a cash balance of Rs 3,197 crore and said it does not foresee any further funding requirements for ongoing operations. Debt refinancing talks are underway and expected to close in the next quarter.
Investor optimism builds, but risks remain
While the turnaround signals are encouraging, Ola acknowledged macro uncertainties, including supply chain risks and growing competition, that could impact execution in the coming quarters.
Still, with margins improving, cash burn narrowing, and demand holding steady, the stock’s rally suggests investors are beginning to price in a credible shift toward profitability. Whether the company can sustain this momentum remains the key question.
Also read | Ola Electric Q1 Results: Net loss widens 23% YoY to Rs 428 crore, revenue drops 50%
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