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Ola logged a weak Q4, with revenue down 57% YoY on volume drop of 61% YoY. Gross margin (GM) rose by 424bps QoQ to 38.5%, aided by PLI accrual for Gen3. EBITDAM losses expanded to -106% from -58% in Q3. The underlying E2W theme is strong; the industry is seeing healthy growth (60%/45% YoY in Apr/Mar-26), with uptick in penetration following a dip due to recent GST cuts. While Ola has seen some sequential volume improvement (Mar-Apr retails at 10-12k/mth vs ~8k/mth on average from Nov-25 to Jan-26) and market share (8-9% in Apr-26/May-26; Q4FY26: ~5%); we attribute the volume growth to the currently better placed production capacity, share gains in the more pricesensitive northern markets, and E-2W incumbents/Ather operating at peak utilization amid strong E-2W demand. Ola is adopting several measures to improve execution, cut costs/conserve cash (guides to Rs3.5bn/quarter opex; Rs3.8bn in Q4FY26), and improve brand perception (service-related issues have started resolving). We believe this could be a difficult, long-drawn-out process, especially due to greater focus by incumbents + scale-up at Ather. Additionally, new capacities coming onstream for incumbents/Ather in H2FY26 would reintroduce competition in the industry structure. Given the current dynamics, Ola’s recovery in volume and market share remains monitorable. We increase FY27E volume by ~10%, given the strong momentum in the underlying E-2W industry and, accordingly, raise our SoTP-based TP by 25% to Rs25 from Rs20 at 3.5x EV/S for the Auto business. We prefer to play the E2W theme with Ather and TVSL (refer to Yet another mega shift in motion; Ather the frontrunner).

Topline declines further; GM sees another quarter of improvement

Revenue fell 57% YoY, due to 61% decline in volume coupled with 10% dip in ASP QoQ mainly owing to a one-time change in revenue recognition for warranty. Reported GM rose by 424bps QoQ to 38.5%. Adjusted GM (ex-PLI) improved by 489bps QoQ to 33.5%. EBITDAM fell to -106% from -58% in Q3FY26. Loss stood at Rs4,960mn.

Earnings call KTAs

1) Deliveries improved materially post Q4, with monthly delivery trends at ~10k units in Apr-26 and 14–15k units expected in May-26. Current order backlog is 40–45k units.

2) Ola expects a continued rebound in volumes in June and July, targeting 17–18k/mth units in the near term, with E-bike contributing to 15% of volumes.

3) The mgmt highlighted that vertical integration benefits are beginning to reflect in the GM and now sees in-house cell manufacturing becoming cheaper vs external procurement (expects ~10-15% cost advantage from own cell manufacturing ahead).

4) Gigafactory Phase 1 infra is in place for 6GWh scale-up in FY27 of which 2GwH will be for internal use, 1GwH for external customers, and balance 3GwH for BESS business (Shakti/Mahashakti). It clarified that currently there are no plans to expand >6GWh capacity; focus remains on fully ramping up and stabilizing the initial phase.

5) Ola indicated that the heavy capex cycle is largely behind for the company. Core auto capex is already in place for up to 1mnpa vehicles. At Rs3-3.5bn quarterly opex, Ola believes adjusted operating EBITDA breakeven is achievable at 20-25k/mth units.

6) Ola has paused aggressive product rollouts till operational/service metrics improve sustainably.

7) Ola noted that earlier spare-parts procurement was reactive (post requirement generation), whereas processes are now being streamlined proactively.

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