OLA Electric Mobility – Q2 FY26 Results & FY25 Guidance Revision Analysis

Ola Electric Mobility Ltd. experienced significant selling pressure, hitting its 5% lower circuit, following the announcement of its Q2 FY26 financial results. The negative market reaction was driven by a substantial downward revision of its full-year revenue guidance, which overshadowed the company's progress in narrowing its net loss and achieving operational milestones. Financial Performance: Net Loss: Narrowed to ₹418 crore from ₹495 crore YoY. However, this was wider than consensus analyst estimates (approx. ₹346 crore). Revenue: Declined 43.2% YoY to ₹690 crore. EBITDA Loss: Narrowed to ₹203 crore from ₹379 crore YoY, though this was also wider than the estimated loss of ₹161 crore. Operational Performance: Volumes: The top-line decline was a direct result of weak volumes, which fell 44% YoY and 19% sequentially to 55,000 units for the quarter. Management Guidance & Commentary: FY25 Guidance Revision: Management has significantly cut its full-year revenue guidance. The new projection is ₹3,000-₹3,200 crore, a substantial reduction from the previous guidance of ₹4,200-₹4,700 crore. The margin target for the auto business remains unchanged at ~5%. Management Narrative: Despite top-line challenges, the company's auto business achieved positive EBITDA and became cash-generative (₹15 crore) for the first time. This was reportedly driven by a 30.7% gross margin and a 52% reduction in operating expenses, indicating a strong focus on cost consolidation. Management termed the flat festive season sales a "healthy transition" and stated a strategic preference for improving cost structure and margin expansion over engaging in aggressive discounting and incentive-based competition. Market Context: The stock is currently trading at ₹47.55, well below its IPO price of ₹76 and approximately 69% below its post-listing high. Investor focus remains on the demand outlook, the impact of competition, and future clarity on PLI benefits.