Ola Electric Q2 FY27 Earnings Call: 6 GWh Gigafactory Commissioned, Supply Now the Binding Constraint (OLAELEC)

Revenue Dips QoQ on Transition; Margins Held, Losses Widened

• Revenue from operations of Rs.421 Cr in Q2 FY 2026-2027 — down from Rs.455 Cr in Q1 FY 2026-2027, on volumes of ~35,000-36,000 units.
• 4,000-5,000 ready-to-deliver vehicles were not revenue-booked as charges were pending; volumes would otherwise have been ~40,000-41,000. These were booked in the first week of October 2026 and will show up as extra volume in Q3 FY 2026-2027.
• Gross margin held at ~30% (Rs.126 Cr) vs 30.5% (Rs.139 Cr) in Q1 FY 2026-2027, despite higher commodity costs; management said the commodity impact was slightly larger than reported but partially nullified by modest price increases.
• Adjusted operating EBITDA loss widened to Rs.246 Cr (vs Rs.195 Cr loss in Q1 FY 2026-2027); PAT loss of Rs.362 Cr (vs Rs.336 Cr loss in Q1 FY 2026-2027).
• Opex of Rs.369 Cr vs Rs.330 Cr QoQ — but adding back a one-time positive adjustment of ~Rs.57 Cr in Q1 FY 2026-2027, comparable opex was Rs.390 Cr, indicating meaningful operating cost improvement.
• Operating cash outflow improved to Rs.188 Cr from Rs.215 Cr outflow in Q1 FY 2026-2027; management said operating cash flows are stabilizing and improving every quarter.

D2C to Dealer Model: Rapid Onboarding, Supply Now the Binding Constraint

• 255 dealer partners and 319 stores as of 8 Nov 2026 — first dealer went live on 4 Sep 2026; 300+ dealers onboarded in 2 months alone. Targets: 450 stores by December 2026 (Q3 FY 2026-2027) and 700+ by March 2027 (end of FY 2026-2027).
• Channel inventory at ~15 days as of the call, below 1 week for early-onboarded dealers; dealer sell-through and re-ordering strong.
• D2C company-store orders stopped from 1 Nov 2026, with stores largely closing by December 2026 (a few to continue); opex expected to reduce meaningfully going forward.
• Demand is no longer the constraint — management stated supply chain ramp-up now sets the pace and the company can sell every vehicle it produces; focus has shifted to working with suppliers to scale supply.
• ~5,000 vehicles with paid orders in September 2026 had deliveries delayed by a week into October 2026 (Q3 FY 2026-2027) due to charger unavailability; the company is running a paid order backlog it intends to quickly extinguish as production ramps.
• In markets where dealers opened early and stabilized, market share has risen above pre-transition levels — an early positive signal for the channel shift.

6 GWh Gigafactory Commissioned; PLI Benefits from Q3 FY27

• COD achieved on 23 Sep 2026 (Q2 FY 2026-2027), adding 3.5 GWh for a total of 6 GWh — per management, the only gigafactory commissioned in India at this scale (vs only one-third in FY 2025-2026).
• The government extended Ola Electric's ACC PLI until 2031 — management cited the extension and said that with PLI milestones already ahead of plan, it expects PLI incentives to start coming in from Q3 FY 2026-2027.
• NMC yields in the mid-70s% (Q2 FY 2026-2027), targeted to reach mid-80s% over the next couple of months (FY 2026-2027), with an itemized engineering roadmap to 90% (period unspecified).
• NMC integration begins in Q3 FY 2026-2027 with a meaningful jump in cell production; Q3 results (January 2027) to show a meaningful increase in cell revenue, sourced from the auto business itself.
• LFP cell production ramp starts in Q4 FY 2026-2027, with in-house LFP cells entering Ola vehicles towards end of Q4 FY 2026-2027 or early Q1 FY 2027-2028; steady-state mix of ~30% NMC / 70% LFP within the own auto business (period unspecified).
• Scaling to 20 GWh is "absolutely on the cards" in its mid-to-long-term roadmap but will not happen in the next couple of quarters; PLI support already covers up to 20 GWh, and the expansion is planned to be funded by bringing external equity into the cell company.
• Capex per GWh guided below Rs.400 Cr at a fully capacitized 20 GWh plant (period unspecified) — the building is already designed for 20 GWh, so the 6-to-20 GWh step-up will cost much less than the 0-to-6 GWh build-out.

Dealer Commission Weighs on Gross Margin; BOM Edge Sustained

• Gross margin to come down a bit in Q3 and Q4 FY 2026-2027 as the business transitions to the dealer model (dealers take a commission), but operating margin will meaningfully improve from Q3 FY 2026-2027 onwards; commodities have stabilized.
• BOM is 15-20% lower than competitors' (analyst cited Ola at ~Rs.80,000-85,000/vehicle vs peers at ~Rs.120,000, near Ola's ASP), driven by vertical integration, in-house component engineering and fewer, more integrated parts.
• Management will structurally reduce BOM further via LFP cell integration and the Gen 4 platform, rolling out slowly from Q4 FY 2026-2027 onwards, despite an industry-wide cyclical commodity upswing.
• Management did not corroborate the analyst-cited ~Rs.11,000/vehicle dealer payout (vs ~Rs.35,000 gross margin/vehicle) but confirmed such payouts are deducted from gross margin; the current "introductory" dealer commission will reduce as dealers stabilize over the next 2-3 quarters (through ~Q1 FY 2027-2028).
• Moving from 2170 cells to own-manufactured 46160 LFP cells is expected to yield about a 20% cost advantage, conditional on reaching the right scale of cell production (period unspecified).
• Working capital turning negative under the dealer model — with demand pull, stable gross margins and a reduced cost base, management expects the auto business to reach a near- to medium-term free cash flow generation scenario.
• Gigafactory capex is finishing with a few more months of tail-ended payments remaining, backed by project finance from SBI.

Debt Cut by ~Rs.1,300-1,400 Cr; GST Refund Cycle Set to Shorten

• Consolidated borrowings reduced from Rs.3,132 Cr (December 2024) to Rs.1,800 Cr (September 2026) — a cut of ~Rs.1,300-1,400 Cr; auto/OEM debt rose from Rs.714 Cr to Rs.1,482 Cr during the implementation phase, with cash deployed into capacity additions and debt paydown.
• Liquidity strengthened by the QIP (June, Q1 FY 2026-2027) and a rights issue completed last week (Q3 FY 2026-2027) — the rights issue is 60% paid-up, with the remaining 40% to be called at a later, not-yet-announced date; management committed to taking it "at the right time". Management did not specify how the partially paid-up shares (separate ISIN) will be treated for diluted share count.
• Government changes effective 1 Nov 2026 (Q3 FY 2026-2027) extend inverted duty refunds beyond raw materials to services (a special advantage for Ola) and introduce 90% auto-approval, hoped to cut refund cycles from 3-4 months to 1-2 months — a meaningful cash flow positive for the auto business.
• Of the analyst-cited ~Rs.1,000 Cr GST receivable, roughly 30-40% pertains to the inverted duty structure (being pursued with different state governments), while the remainder is not "liquid" and must be consumed against future business.
• The government last week announced a policy requiring 40% domestic value addition for domestic grid-scale battery installations — management said that at some point Indian cells will be the only way to meet this requirement, and it expects the whole industry deploying grid-scale battery solutions to consider its products.
• No precise cumulative equity total was disclosed — management outlined pre-IPO fundraising of ~2,500, the IPO of ~5,000, and post-IPO the QIP plus the rights issue (units/currency not stated), saying it did not want to be 20% off on such a number.

FY28 Ramp: Cell Consumption, Product Pipeline and Growth Outlook

• Management's FY28 guidance of 2-3 GWh of cell consumption in its own vehicles should be modeled at ~5 kWh average battery pack per vehicle, which could translate to ~400k-500k vehicle orders in FY28 (per Bhavish Aggarwal, responding to Chintan Jain of Sagun Capital).
• Current average battery capacity is ~3.8 kWh per vehicle (Q2 FY 2026-2027); as 4680 cell-based vehicles are brought in, they carry higher capacity and customers are flocking to them, supporting the higher FY28 average assumption.
• S1G launch guided for Q4 FY 2026-2027 — testing underway; the exact launch month (January vs March, possibly slipping "a month or so") will be decided as the demand scenario evolves; only token reservations of Rs.500-Rs.1,000 taken so far.
• Management is deliberately not accelerating new-product deliveries — its "whole and sole focus" is scaling up the supply chain and adding dealerships to meet demand for current products.
• The Axis Energy partnership is tied to the upcoming Mahashakti product (yet to be launched), which Axis Energy has been keen on using; Ola will make Mahashakti with its own Indian cells.
• Management is looking to ramp up growth in a sustainable, margin-accretive way in FY 2027-2028, citing strong macro pull and tailwinds across both the EV industry and the cell industry; FY 2027-2028 flagged as the period of the cell business ramp and the broader manufacturing/supply chain flywheel.