Ola Electric shares soar 18% even as Q1 loss widens; Here's why

Ola Electric shares rose over 9 per cent even after the company's net loss widened in the first quarter of the current financial year

Shares of Ola Electric Mobility rose nearly 18 per cent on Monday even after the company's net loss widened in the first quarter of the  current financial year, while its revenue halved. The positive momentum in the stock came as the Bhavish Aggarwal-led firm said it expects operating cash flow of the auto business to turn positive in the coming quarters. 

 

The electric two-wheeler maker's stock rose as much as 17.9 per cent during the day to ₹46.8 per share, the biggest intraday rise since November 27, 2024. The stock pared gains to trade 15.5 per cent higher at ₹45.9 apiece, compared to a 0.39 per cent decline in Nifty 50 as of 1:35 PM. 

 

Shares of the company snapped a five-day losing streak on Monday and currently trade at 3.6 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 51 per cent this year, compared to a 6 per cent advance in the benchmark Nifty 50. Ola Electric has a total market capitalisation of ₹18,768.08 crore.  

Ola Electric Q1 results 

The EV maker reported a net loss of ₹428 crore in the June quarter of the financial year 2026 (Q1-FY26), as against a loss of ₹347 crore in the same period last year. However, the reported loss was less than what analysts had anticipated, with Bloomberg consensus analysts expecting a loss of ₹452 crore. 

 

The widening in loss came as the company's revenue halved to ₹828 crore in the first quarter versus ₹1,644 crore in the corresponding period last year. On the margins front, the earnings before interest, taxes, depreciation, and amortisation (Ebitda) loss came in at ₹237 crore versus a loss of 205 crore earlier. 

 

The company's auto segment turned Ebitda positive in June, driven by improved gross margins and cost efficiencies. The auto segment Ebitda improved to 11.6 per cent, compared to 90.6 per cent in the fourth quarter of the previous financial year. The company’s cost optimisation initiative, Project Lakshya, has driven significant operating efficiencies, reducing monthly auto opex from ₹178 crore to ₹105 crore, the company said. 

Ola Electric FY26 Outlook

The company delivered 68,192 vehicles during the quarter, marking a 32.7 per cent rise over the previous quarter. 

 

It expects to sell between 3,25,000 and 3,75,000 vehicles in FY26, generating revenue in the range of ₹4,200 crore to ₹4,700 crore, it said in the exchange filing. With Production Linked Incentive (PLI) benefits set to begin from the second quarter for its Gen 3 product portfolio, gross margins are projected to improve to 35-40 per cent.

 

The company anticipates full-year auto Ebitda to exceed 5 per cent and expects the auto business to remain Ebitda-positive from the second quarter onwards. 

Should you invest? 

The stock of Ola Electric has been an underperformer after listing due to various headwinds, and the recent models launched have also failed to gain significant market share, said Kranthi Bathini, director - equity strategy at WealthMills Securities. Post the Q1 results, the management indicated that they are aiming to break even soon, which has attracted some buying interest, Bathini noted.

 

However, he cautioned that the stock is suitable only for investors with a long-term horizon and high-risk appetite. "We still need to see how the key revenue and financial parameters improve," he added.

 

On the valuation front, the stock has corrected over 60-70 per cent from its peak, and the market appears more comfortable with the current levels. "However, profitability remains key for investor confidence and broader market interest," Bathini said.