Ola Electric Mobility Ltd Q4 FY26 Earnings Call: Guides 40,000-45,000 Unit Sales, Gross Margin Hits 38.5%

Ola Electric Mobility Ltd held its Q4 FY26 earnings call on May 20, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Gross Margins and First Positive Operating Cash Flow

• FY 2025-2026 consolidated revenue of Rs.2,253 crores— driven by 173,794 deliveries, with consolidated gross margin improving to 30.6% for the full year.
• Q4 FY 2025-2026 consolidated gross margin of 38.5%— up from 34.3% in Q3 FY 2025-2026 and 13.7% in Q4 FY 2024-2025; excluding PLI, gross margins were 33.5%.
• First operating cash flow positive quarter— consolidated CFO of Rs.91 crores in Q4 FY 2025-2026; the auto business alone delivered Rs.213 crores of CFO and Rs.173 crores of free cash flow.
• FY 2025-2026 warranty costs collapsed to Rs.59 crores— from over Rs.500 crores in FY 2024-2025, validating Gen 3 platform quality with warranty costs 70% lower than Gen 2.
• Consolidated opex halved year-on-year— from Rs.844 crores in Q4 FY 2024-2025 to Rs.428 crores in Q4 FY 2025-2026.

Structural Margin Leadership with Further Opex Compression Ahead

• Gross margin leadership is structural, not dependent on PLI— management stated PLI-excluded gross margins are "fairly high" and expect margins to remain healthy in the short term and incrementally increase over the long term.
• Opex target of ~Rs.350 crores per quarter— management guided opex to further decline to Rs.100-120 crores/month over Q1 and Q2 of FY 2026-2027, down from Rs.428 crores in Q4 FY 2025-2026.
• Adjusted EBITDA break-even achievable at 20,000-25,000 units/month— based on ~38% gross margins and an ASP of ~Rs.1.4 lakh (gross profit ~Rs.50,000/vehicle) against opex of ~Rs.300-350 crores/quarter.
• Break-even volume of 20,000 units/month— management confirmed this as the level at which Ola Electric reaches overall break-even.
• R&D expense trending to mid-single digits of revenue— including ~20-30% capitalised portion, considered a strategic priority as revenue scales.

Strong Order Backlog Drives Q1 FY27 Guidance of 40,000-45,000 Units

• Q1 FY 2026-2027 order guidance of 40,000-45,000 units— nearly double Q4 FY 2025-2026 levels, with consolidated revenue expected at Rs.500-Rs.550 crores.
• April 2026 registrations of 12,000 units (+20% MoM)— against an industry decline of >22%; May trending at 14,000-15,000 units, with March at 10,000 units.
• Volume rebound trajectory of 17,000-18,000 units/month by June/July 2026— building toward 20,000-22,000 units/month over Q2 FY 2026-2027 as service stability and inventory availability improve.
• Free inventory days of only 3-4 days as of May 2026— with an order backlog driven by meaningful demand increase for EVs; management expects near-term volume growth of 10-20% as supply chain ramps.
• Roadster motorcycle gaining traction— capturing 50% EV bike market share and 15% of April gross orders, with certified range up to 500+ km (using 9.1 kWh battery and own 4680 cells).
• Operating cash flow burn of Rs.300-500 crores expected in FY 2026-2027— turning positive once monthly orders exceed 25,000; the auto business expected to reach adjusted EBITDA and cash-flow positivity through FY 2026-2027.

Own-Cell Transition Underway with 15% of Orders Already on 4680 Cells

• 15% of orders already using Ola's own 4680 cells— with plans to transition the entire vehicle portfolio to own Bharat cells by end of Q2 FY 2026-2027 (September 2026).
• 6 GWh total battery capacity planned— 3 GWh already commissioned and ramping, with the remaining 3 GWh to be commissioned by end of June 2026 (Q1 FY 2026-2027); by end of Q2 FY 2026-2027, gigafactory expected to produce 2+ GWh.
• 10-15% cost advantage for self-manufactured cells at 6 GWh scale— management noted that even at current low production volumes, it is cheaper to manufacture own cells versus importing on a pure bill-of-materials cost basis, despite the lithium upcycle.
• Plan to expand total capacity to 20 GWh by FY 2027-2028 by adding prismatic cell lines— contingent on raising capital at the subsidiary level during FY 2026-2027; current cylindrical capacity will not be increased beyond 6 GWh until utilised.
• Battery business has three revenue engines— mobility (captive EV demand ~1.5-2 GWh by FY 2026-2027), Shakti (B2B/B2C energy storage), and Mahashakti (grid storage with prismatic LFP platform under development).
• LFP cell production ramp-up in Q1 FY 2026-2027— Shakti BESS product will move from NMC to LFP in the next quarter once cells are ready; lab-scale development of solid-state (performance) and sodium-ion (cost) continues without manufacturing capex.
• Management cited that "government policy direction favours domestic battery supply chain"— with potential ALBM/ALCM mandates, ACC PLI extension, and BESS domestic procurement mandates positioning the company's battery business favourably.

Disciplined Capex Path with Debt Repayments of Over Rs.400 Crores Due in FY27

• Automotive maintenance capex guided at under Rs.50 crores annuallyfor FY 2027-2028 and beyond, with total automotive capex minimal as capacity is already built out; the auto business requires no incremental capex to scale to a million units annually.
• Net debt of ~Rs.950 crores as of March 31, 2026— gross cash of Rs.1,550-1,600 crores against total debt of ~Rs.2,500 crores; debt repayments of over Rs.400 crores are due in FY 2026-2027, with management potentially accelerating some repayments due to higher current cost of debt.
• Cell business capex for 6 GWh is complete— payouts continue in Q1 and Q2 of FY 2026-2027; no further cell capex until capital is raised at the subsidiary level, planned for FY 2026-2027.
• One-time revenue recognition correction of Rs.20-30 crores in Q4 FY 2025-2026— due to a change in extended service/warranty package accounting, with revenue now spread over the contract period rather than recognised upfront.
• New product launches deferred until volumes recover— management plans to resume launches over FY 2026-2027 as part of capital allocation discipline; an analyst and investor day at the gigafactory is planned for June 2026.
• Management acknowledged strong interest in cell business monetisation— media articles suggested a Rs.2,000 crore monetisation, but management provided no specifics, noting capital raising for the subsidiary will occur in due course.