Ola Electric share price extends rally, zooms 22% in two days despite ₹428 crore loss in Q1. What's behind the surge?
Apart from this, many operating performance updates — improvement in margins to the auto segment, turning EBITDA positive in June —appeared to be driving the interest in the two-wheeler electric company's stock.
Ola Electric shares, which are down almost 69% from their 52-week high levels, witnessed a spurt in buying interest as investors cheered the improvement in Q1FY26 performance over Q4FY25. The loss narrowed from ₹ 870 crore posted in the preceding quarter, even as it widened on a YoY basis.
The consolidated revenue from operations stood at ₹ 828 crore during the June quarter, higher than ₹ 611 crore in the March quarter.
'What sparked investor interest was the sequential improvement—losses narrowed significantly from ₹ 870 crore in Q4 FY25—and the operational turnaround in the automotive segment. Notably, the unit achieved positive EBITDA in June and delivered a record gross margin of 25.6%, driven by vertical integration, disciplined cost control under Project 'Lakshya,' and the shift to more efficient Gen‑3 models,' said Harshal Dasani, Business Head, INVasset PMS.
'Market confidence was further bolstered by Ola's guidance for FY26, with projected gross margins of 35–40%, supported by PLI-linked incentives and a target of becoming EBITDA-positive from Q2 onward. The company also introduced rare-earth-free motors, addressing long-term supply chain concerns and adding credibility to its localisation roadmap," Dasani added.
Ola expects to sell between 3,25,000 to 3,75,000 vehicles and generate revenue of ₹ 4200 - ₹ 4700 crore in FY26.
With Production Linked Incentive (PLI) benefits beginning from Q2 for the Gen 3 product portfolio, gross margin is projected to rise to 35% - 40%, and the company anticipates full-year auto EBITDA of above 5%, the company said in a release post Q1 results.
While the headline loss paints a grim picture, the underlying operational metrics indicate a company steadily regaining control and positioning itself for sustainable profitability, he said, adding that this is a classic case of the market rewarding execution clarity over immediate bottom-line performance.
Ola Electric share price settled over 18% higher on the BSE following its Q1 results announcement earlier in the day. In intraday today, Ola Electric share price jumped almost 4% to ₹ 48.88, taking the two-day gains to 22%.
Global brokerage Goldman Sachs maintained a 'Buy' rating on Ola Electric stock and raised the target price to ₹ 63 from ₹ 60 earlier. HSBC also raised its target for Ola Electric share price to ₹ 49 while maintaining a 'Hold' rating.
After multiple misses, punchy gross margin expansion in 1Q was a positive surprise, said HSBC. Yet it remains concerned that the cell business might not be eligible for the PLI benefit, weighing down the company's longer-term margin.
However, Kotak Institutional Equities (KIE) retained its 'Sell' rating on Ola Electric stock. "While the company has improved its profitability significantly, volume offtake remains below expectations given muted industry growth and increased competitive intensity, which remains an area of concern. Maintain SELL with an unchanged FV of ₹ 30 based on DCF methodology (3.5X FY2027E EV/sales)," it said.
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