Ola Electric reported a 30.7% gross margin in Q2 FY26, surpassing many ICE companies. The Auto business turned cash-generative with ₹15 crore in cash flow from operations. The company commissioned a 2.5 GWh Gigafactory and launched Ola Shakti, a residential BESS product. Motorcycle sales accounted for 12%-15% of total volume. The company expects gross margins of 36%-37% going forward, targeting a ₹1,000 crore revenue from the BESS unit in FY27.
Strong Q2 Performance
During the Q2 FY26 earnings call, Bhavish Aggarwal, Chairman and Managing Director of Ola Electric Mobility Limited, highlighted the company’s strong progress towards profitability. Key achievements include:
- Gross Margin: Achieved 30.7% gross margin in the Auto business.
- Cash Flow: The Auto business became cash-generative, reporting ₹15 crore in cash flow from operations.
- Gigafactory: Commissioned a 2.5 GWh Gigafactory, with plans to scale up to 5.9 GWh by March.
BESS Business Expansion
Ola Electric expanded into the energy segment with the launch of Ola Shakti, a residential Battery Energy Storage System (BESS) product. The company anticipates significant revenue from this segment:
- Q4 FY26 Revenue: Expects approximately ₹100 crore in revenue, selling around 7,000-8,000 units.
- FY27 Revenue Target: Aims for ₹1,000 crore in revenue from the BESS business.
Motorcycle Sales and ASP
The company also shared details on its motorcycle sales and Average Selling Price (ASP):
- Motorcycle Mix: Motorcycle sales accounted for 12%-15% of the total volume in Q2.
- ASP Increase: The two-wheeler business ASP increased from approximately ₹121,000 to ₹131,000.
Future Outlook and Strategy
Ola Electric is focused on consolidating its operations, improving cost efficiencies, and launching new products. Key strategies include:
- Gross Margin Improvement: Expects gross margins of 36%-37% from Q4 FY26 onwards.
- Market Share Target: Aims to be one of the top 1-2 leading players with a market share of around 25%.
Warranty and Service
The company is actively working to improve its service network and address customer concerns:
- Defect Rates: Gen 3 products have almost half the defect rates compared to previous generations.
- Service Improvement: The Hyperservice initiative aims to make parts openly available and improve the service experience.
Source: BSE
