Ola Electric’s Auto Business Achieves Profitability

Ola Electric reported its first-ever EBITDA-positive quarter in the auto business in the second quarter of FY26. While the company continues to make losses on a consolidated basis, the automotive segment posted a 0.3% EBITDA margin, reversing a negative 5.3% margin in the previous quarter. Meanwhile, the company has slashed its full-year revenue guidance.

Ola Electric operates its business under two segments — auto and cell. The milestone comes even as the company’s sales volumes have been on a steady decline over the past year. Once the market leader in India’s electric two-wheeler segment, Ola Electric slipped to fifth position in October.

During the July–September quarter, Ola Electric’s automotive business reported revenue of Rs 688 crore, down 43% year-on-year and 17% sequentially. The decline mirrors falling sales volumes, which dropped to 52,666 units, a 47% decrease from 98,619 units a year earlier and 23% lower than 68,192 units in the first quarter.

The company reported an EBITDA of Rs 2 crore, compared with a loss of Rs 162 crore in the year-ago period and Rs 46 crore loss in the previous quarter. Ola Electric attributed the breakeven to an improved gross margin of 30.7%, up from 18.5% a year earlier and 25.6% in the first quarter. The company also said its operating expenses have been reduced by around 52% since the third quarter of last year.

The segment’s operational expense reduced to Rs 258 crore from Rs 308 crore in the first quarter and Rs 480 crore in the year-ago quarter. Earlier, the company had said the auto segment EBITDA will achieve breakeven when its monthly two-wheeler sales hit 25,000 units.

“While the market has been flat, competition has intensified. Many OEMs have chosen to pursue short-term market share through aggressive discounting and elevated channel incentives, at the cost of profitability,” the company said.

“We have taken the opposite approach — focusing on improving our cost structure, deepening product quality and reliability, and driving margin expansion. This positions us to grow in a margin accretive way and gain profitable share as the market returns to growth.”

The automotive business reported a loss after tax of Rs 233 crore, compared to a loss of Rs 347 crore a year earlier and a loss of Rs 261 crore in the first quarter. Auto business turned cash-generative, with underlying cash flow from operations of Rs 15 cr (reported Rs 40 cr after one-time festive inventory build-up), the company said.

However, on a consolidated basis, Ola Electric’s EBITDA margin was at negative 18.1% during the quarter, with an operating loss of Rs 137 crore and a loss after tax of Rs 418 crore. While EBITDA has halved from the year-ago loss, the loss after tax has reduced only by 15%. 
Ola Electric recently commissioned 2.5 GWh cell manufacturing capacity at its gigafactory and plans to scale to 5.9 GWh by March 2026. It is India’s first giga-scale cell plant and the first set of vehicles with the 4680 cell has been delivered. 

OUTLOOK
Ola Electric expects to continue improvement in profitability in the automobile business in the coming quarters, projecting the auto segment EBITDA margin to reach around 5% and gross margins to rise to about 40% by the end of FY26. 

For the second half of the financial year, Ola Electric is targeting to deliver about 100,000 units, with additional volumes from the newly launched Ola Shakti models starting in the fourth quarter

However, on a full-year basis, the company has slashed its outlook on revenue. It now anticipates consolidated revenue of Rs 3,000–3,200 crore, reflecting what it called a balanced approach to growth and profitability, with overall performance expected to surpass its earlier guidance.

Earlier, Ola Electric projected full financial year volumes to be around 3,25,000 - 3,75,000 vehicles and revenue to be around Rs 4,200 crore – Rs 4,700 crore. In financial year 2025, the company sold 3,59,221 two-wheelers and clocked Rs 4,645 crore in consolidated revenue. 

“For the Auto segment, we expect lower volumes than the Q1 guidance as we continue to focus on margin and cash discipline in a hyper-competitive market,” the company said.