This article first appeared on GuruFocus .
-
Gross Margin:30.7%, outperforming many ICE companies.
-
Cash Flow from Operations:INR 15 crores, indicating cash generative status.
-
Giga-factory Capacity:Commissioned at 2.5 gigawatt hours, scaling to 5.9 gigawatt hours by March.
Release Date: November 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Ola Electric Mobility Ltd ( NSE:OLAELEC ) reported a strong gross margin of 30.7%, outperforming many internal combustion engine (ICE) companies.
-
The company has turned cash generative with an underlying cash flow from operations of INR15 crores.
-
Ola Electric commissioned a giga-factory with a 2.5 gigawatt-hour capacity, aiming to scale up to 5.9 gigawatt-hours by March.
-
The launch of Ola Shakti, India's first residential Battery Energy Storage System (BESS) product, is expected to drive new revenue streams.
-
The average selling price (ASP) for the two-wheeler business increased from INR121,000 to INR131,000, attributed to better product mix and additional features.
Negative Points
-
The market share for Ola Electric Mobility Ltd ( NSE:OLAELEC ) has been underwhelming, with some loss attributed to competitors buying market share.
-
The company faces challenges in the availability of trained EV technicians, impacting the service network.
-
Warranty costs have been a drag in previous quarters, although improvements are expected with the transition to Gen 3 products.
-
Despite multiple initiatives, there is visible customer frustration regarding service backlogs and resolution times.
-
The industry growth has slowed, with the market in a consolidation phase, impacting overall sales dynamics.
Q & A Highlights
-
Warning! GuruFocus has detected 3 Warning Signs with NSE:OLAELEC.
-
Is NSE:OLAELEC fairly valued? Test your thesis with our free DCF calculator.
Q: Can you provide insights into the assumptions behind your FY27 revenue guidance for the BESS business? A: Bhavish Aggarwal, Executive Chairman and Managing Director, explained that the BESS business shares manufacturing and R&D with the automotive segment, using the same 4680 cells. The product targets the inverter market and complements rooftop solar growth. The average selling price ranges from INR50,000 to INR2 lakh. They expect INR100 crore revenue in Q4 FY26 and INR1,000 crore in FY27, with healthy gross margins.
Q: What factors contributed to the increase in ASP for the two-wheeler business this quarter? A: Bhavish Aggarwal noted that the ASP increase from INR121,000 to INR131,000 was due to higher attachments of add-ons like MoveOS+ and accessories, a broader range of pricing with Gen 3 products, and higher average pricing for motorcycles. Despite competitive pricing, gross margins remain healthy.
Q: Can you clarify the motorcycle mix in the September quarter and its impact on overall volume? A: The quarterly run rate for motorcycles was around 12% to 15% of total volume, indicating increased interest and traction. The company is gradually rolling out motorcycles across the country.
Q: What is the status of the Gen 3 transition and PLI certification? A: Bhavish Aggarwal confirmed that Q2 was almost entirely Gen 3, with Gen 2 phased out. PLI for Gen 3 scooters was received in early September, and all scooters now have PLI. Bikes are expected to receive PLI by January or February.
Q: How is the company addressing warranty costs and market share concerns? A: Warranty costs are expected to decrease with the Gen 3 transition, which has shown improved quality. Market share has been under pressure, but the focus is on operational excellence and preparing for the next growth phase as the market stabilizes.
Q: What are the expectations for industry growth and Ola's market share in FY27? A: Bhavish Aggarwal anticipates industry growth to resume, potentially in the 15% to 30% range. Ola aims to be a leading player with a market share target of around 25%, focusing on margin-accretive growth.
Q: How does the company plan to leverage its battery cell production for cost parity and yield improvements? A: Parity on cell cost is expected at 3 to 5 gigawatt hours. The rollout of in-house cells has begun, with a focus on improving throughput and yield. All cells produced will be used in Ola's vehicles and the Shakti product.
Q: What is the company's strategy for expanding beyond two-wheelers with the BESS product? A: The BESS product targets a broad market, including telecom towers and small commercial establishments. Ola aims for INR1,000 crore revenue from BESS in FY27, leveraging competitive pricing and vertical integration.
Q: How is Ola addressing service network challenges and customer experience? A: The company is focused on improving service network operations and expanding third-party service options. The Hyperservice initiative aims to make parts openly available, enhancing customer service and satisfaction.
Q: What measures are in place to mitigate risks associated with the new 4680 cells? A: Bhavish Aggarwal emphasized a gradual ramp-up of cell production, extensive testing, and real-time tracking of vehicles using the new cells. Conservative warranty provisioning is also in place to manage financial risks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
