Ola Electric's Q2 FY26: A Turning Point Towards Profitability and Diversification

Ola Electric Mobility Limited has marked Q2 FY26 as a pivotal quarter, demonstrating a significant shift towards sustainable profitability and strategic diversification. The company reported a consolidated revenue from operations of ₹690 crore. Notably, the Auto business achieved EBITDA profitability for the first time, a testament to its disciplined focus on cost optimization and vertical integration. While the consolidated EBITDA margin remained at -18.1%, the Auto segment's EBITDA margin turned positive at 0.3%, signaling a crucial turnaround. The company's gross margin expanded impressively to 30.7%, surpassing many traditional two-wheeler manufacturers.

The Automotive segment was the primary revenue driver, contributing ₹688 crore, representing 99.71% of the total consolidated revenue. The nascent Cell segment contributed ₹4 crore, or 0.58%. This quarter saw the Auto business turn cash-generative, with an underlying cash flow from operations of ₹15 crore, even after a one-time festive inventory build-up. This indicates a healthier operational cash flow, moving away from previous quarters' negative figures. The company's strategic decision to prioritize margin expansion over aggressive market share acquisition in a flat EV market appears to be yielding results.

Strategic Expansion into Energy Storage

A significant development this quarter is Ola Electric's aggressive push into the energy storage segment. The company commissioned its Gigafactory with 2.5 GWh capacity, aiming to scale to 5.9 GWh by March 2026. This facility is India's first operational giga-scale cell plant, with the first 4680 vehicles already delivered. In October 2025, Ola Electric launched 'Ola Shakti,' India's first residential Battery Energy Storage System (BESS) powered by its in-house Bharat 4680 cells. This initiative is expected to generate ₹100 crore in revenue in Q4 FY26 and an impressive ₹1,000-₹1,200 crore in annual revenue for FY27, with healthy gross margins of 40-50%.

The company is not stopping at residential solutions; it plans to launch containerized energy-storage systems for commercial, industrial, and utility-scale use by Q1 FY26. This strategic move positions Ola Electric to capture a meaningful share of India's rapidly expanding grid-scale BESS market, which currently relies heavily on imported systems. To meet this growing demand, the company intends to expand its total cell-manufacturing capacity to 20 GWh by the second half of FY27, aiming for full supply integration across its Auto and Energy businesses.

Operational Improvements and Future Outlook

Management emphasized its focus on improving customer experience and service network through initiatives like 'HyperService.' This program aims to open genuine parts access to customers and third-party garages, reduce warranty costs, and unlock a high-margin parts business. While acknowledging past challenges with service, the company is confident that these structural changes will lead to improved customer satisfaction and profitability.

Looking ahead, Ola Electric has provided optimistic guidance for FY26, targeting total Auto segment deliveries of approximately 100,000 units in H2 FY26. Consolidated revenue for FY26 is projected to be around ₹3,000-₹3,200 crore. The company expects to exit Q4 FY26 with Auto gross margins around 40% and segment EBITDA of approximately 5%. Cell gross margins are anticipated to stabilize at 30% by early FY27. These projections underscore management's commitment to profitable growth and operational excellence.

Ola Electric's Q2 FY26 results highlight a strategic pivot towards sustainable profitability and a robust entry into the energy storage market. The company's focus on vertical integration, product quality, and operational efficiency, coupled with ambitious expansion plans in the cell and BESS segments, positions it for long-term compounding growth across both automotive and energy verticals. This quarter marks a clear step in establishing a broader revenue base, higher structural margins, and stronger cash conversion.