Ola Electric shares slip 6% after Q1 results as PLI penalty, auditor concerns weigh
ADVERTISEMENT
Ola Electric Mobility shares were trading lower on Monday after the company’s June-quarter results, with the shares falling as much as 6.06% to ₹38.58 earlier in the session. At the time of reporting, the stock was at ₹40.48, down 1.44%, or ₹0.59.
The market reaction came after Ola Electric reported a reversal of a provision related to the penalty linked to its battery Production Linked Incentive (PLI) targets. The company had earlier said it could face a penalty of about ₹100 crore over the PLI timeline.
The company's auditor, in its P&L statement's notes to accounts for the quarter, said that Ola Electric had reversed a penalty provision worth ₹57 crore during the quarter, which helped the net loss appear narrower on a year-on-year basis.
“During the quarter ended 30 June 2026, OCTPL has reversed the entire provision and recognised a corresponding credit within other expenses in the Statement of unaudited consolidated financial results and have not created any provision for the quarter ended 30 June 2026 on the basis that it had submitted a request to MHI seeking an extension of time for compliance with the investment milestone and a waiver of the related liquidated damages. As at June 30, 2026, approval from MHI in respect of such request had not been received,” the auditor note said.
In the June quarter, Ola Electric’s consolidated net loss narrowed to ₹336 crore from ₹428 crore a year earlier and ₹500 crore in the March quarter. Revenue from operations, however, dropped 45% year-on-year to ₹455 crore from ₹828 crore.
The company’s operating numbers showed a sequential recovery. Vehicle registrations rose 97% from the March quarter to 43,719 units, while its electric two-wheeler market share increased to 8.4% from 5.1%. Orders nearly doubled to about 44,000 units from 22,522 in the previous quarter, while deliveries increased to around 39,200 units from 20,256. Auto revenue also rose 72% sequentially. The improvement in volumes came even as overall quarterly revenue remained below the company’s earlier guidance.
Ahead of the results, Ola Electric had guided for 40,000-45,000 orders and consolidated revenue of ₹500-550 crore for Q1 FY27. CFO Deepak Rastogi had said the company expected the auto business to move towards adjusted operating EBITDA and cash-flow positivity through FY27.
On the company’s electric motorcycle business, founder and CEO Bhavish Aggarwal said during the previous earnings call that Ola was seeing “good traction” as it scaled the product.
The June-quarter results also showed the gap between the company’s volume recovery and revenue performance. While registrations and market share improved sequentially, revenue was still sharply lower from a year earlier.
"Despite a challenging commodity environment, Ola sustained a gross margin of 30.5%, reflecting the strength of our product economics and maintaining our position among the industry's leading electric two-wheeler gross-margin profiles," the company said in its earnings report.
The company noted that commodity costs during the quarter increased by around 11%, driven by higher copper and aluminium prices, lithium supply constraints in China, and elevated plastics and polymer costs following crude oil supply disruptions.
Even as input costs remained elevated, Ola Electric said it continued to execute its cost optimisation initiatives. Consolidated operating expenses declined 22% QoQ to ₹333 crore.
"We remain focused on achieving a lower steady-state operating cost base of approximately ₹300 crore per quarter. As monthly deliveries continue to scale towards our previously communicated operating breakeven range, we expect operating leverage and continued cost efficiencies to drive further expansion in adjusted operating EBITDA margins," the company said.