Ola Electric sets bold FY26 goals despite revenue drop and regulatory hurdles
Ola Electric has set an ambitious revenue target of Rs. 4200–4700 crore for FY26, even as it navigates a turbulent operating environment. The electric two-wheeler manufacturer, led by Bhavish Aggarwal, faces a combination of financial strain, regulatory issues, service-related criticism and rising competition.
For the quarter ending June 2025, the company reported a steep decline in revenue, down nearly 50% year-on-year to Rs. 828 crore. Simultaneously, net losses widened by 23%, touching Rs. 428 crore, underscoring the challenges ahead in meeting its annual revenue goals.
Despite this sluggish start, Ola Electric is optimistic about a rebound in the coming quarters. A key factor in this outlook is the expected benefit from the government’s Production Linked Incentive (PLI) scheme, anticipated to kick in during Q2. The company believes this could significantly improve gross margins and push annual auto EBITDA into positive territory.
Sales for the first quarter stood at 68,192 units. Ola plans to leverage festive-season demand and the introduction of its next-generation scooters and Roadster motorcycles to boost full-year volumes to between 3.25 lakh and 3.75 lakh units.
However, challenges remain on the ground. Reports suggest that nearly 90% of Ola’s showrooms in Maharashtra may face temporary closures due to permit issues, potentially hampering sales in a key market.
Despite these concerns, Ola has laid out plans to keep operational costs stable while enhancing product quality and reducing material costs. It has allocated Rs. 300 crore in capital expenditure for the remainder of FY26, primarily for R&D, while ruling out any major new product or manufacturing investments this fiscal.
The company also expects to generate operating cash flow later in the year and aims to be free cash flow (FCF) positive by the end of FY26. Ola reported a cash reserve of Rs. 3197 crore at the end of June 2025, indicating a strong funding position for the short to mid-term.
Ola Electric’s performance in the second quarter will be critical in determining whether it can meet its ambitious financial goals and recover from its recent downturn.
