The share price of Ola Electric Mobility surprised the street today, surging 20% intraday to hit a high of Rs 47.76, even as the company reported a wider net loss for Q1 FY26. The stock ended the at 47.66, up 19.75%. The rally has caught many by surprise, especially as the company reported a steep 49.64% decline in revenue from operations to Rs 828 crore, down from Rs 1,644 crore in the same quarter last year. Here’s why investors are still riding high on Ola Electric Mobility-
Turnaround indications in auto segment profitability
One of the main drivers of the company’s current stock rally is the improving profitability in its auto segment. The segment’s EBITDA saw a major improvement. It was negative 90.6% in Q4FY25, which improved to negative 11.6% in Q1FY26.
Project Lakshya delivers on cost cuts
Ola’s internal cost-saving initiative, Project Lakshya, has boosted operating efficiency. The company reported a reduction in monthly auto opex from Rs 178 crore to Rs 105 crore, with overall consolidated opex now standing at Rs 150 crore per month. Ola aims to bring this down further to around Rs 130 crore per month by the end of FY26.
Gross margin forecast boosts
In a post-earnings shareholder letter, Ola Electric mobility said, “This is our best GM performance ever, driven by Gen 3 BOM reduction as a result of our focus on vertical integration and in-house tech… Our FY26 exit target is to have our GM in the range of 35-40% with PLI benefits.”
This means gross margins per vehicle could rise to Rs 40,000 to Rs 45,000.
The revenue drop in Q1FY26
While the company’s revenue dropped significantly on a YoY basis, it actually improved sequentially, rising from Rs 611 crore in Q4 FY25 to Rs 828 crore in Q1 FY26. The decline was primarily driven by lower sales amid stiff competition from TVS Motor, Ather Energy, and Bajaj Auto. Yet, QoQ revenues improved from Rs 611 crore in the previous quarter.
Ola Electric share price performance
Ola’s share price has seen a mixed performance this year. It is up 3.5% over the last five trading sessions, but down nearly 10% over the past month. In the last six months, the stock has gained about 41%, but it is still down 53% year-on-year. For 2025 so far, Ola Electric has seen a 50% drop in its stock value. The stock’s 52-week high is Rs 157.40, and the 52-week low is Rs 39.60. As of today, the company’s market capitalisation stands at Rs 17,740 crore.