On July 14, 2025, Ola Electric surprised the stock market with a 17% intraday surge, hitting a high of ₹46.69, despite posting a 49.64% drop in revenue from operations in Q1 FY26. At first glance, the revenue slump and widening losses would appear to deter investors, yet Ola’s latest strategic moves are fueling unexpected optimism among market participants.
Let’s dive deep into what’s driving this dramatic shift in sentiment and why Ola Electric is suddenly back on investor watchlists.
Financial Snapshot: Q1 FY26 Performance
Revenue: ₹828 crore (down from ₹1,644 crore YoY)
- QoQ Growth: ₹611 crore in Q4 FY25 → ₹828 crore in Q1 FY26
- EBITDA: Improved significantly from -90.6% to -11.6%
- Consolidated Opex: Reduced to ₹150 crore/month
- Net Loss: Widened in Q1 FY26
- Share Price Peak: ₹46.69 intraday
- Market Cap: ₹17,740 crore
Despite a yearly revenue crash, sequential growth and operational improvements have inspired a renewed sense of turnaround potential in the company.
1. Project Lakshya: The Game-Changer in Cost Reduction
At the heart of Ola’s recent transformation is its ambitious internal initiative — Project Lakshya. The company has been aggressively reducing its operational expenditure (Opex), and the results are becoming visible:
- Auto monthly opex: Slashed from ₹178 crore to ₹105 crore
- Overall consolidated opex: Currently at ₹150 crore/month, with plans to drop it further to ₹130 crore/month by FY26-end
This focus on lean operations is driving investor confidence, even in the face of revenue challenges. Lower operating costs mean higher profitability potential in the coming quarters.
2. Gross Margin Turnaround: Vertical Integration Pays Off
In a shareholder letter post-Q1 earnings, Ola Electric highlighted its best-ever gross margin (GM) performance, achieved through:
- BOM (Bill of Materials) cost reduction via Gen 3 platform
- Vertical integration and more in-house technology development
The company is targeting an exit GM of 35-40% in FY26, with the help of PLI (Production Linked Incentive) scheme benefits. If successful, this could boost gross margins per vehicle to ₹40,000-₹45,000, a significant improvement.
This projection has piqued the interest of institutional investors, who now see Ola’s manufacturing strategy as viable and scalable.
3. Segment-Wise EBITDA Gains: Profitability within Reach
Ola’s auto segment, which was once bleeding cash, has shown a sharp turnaround:
- EBITDA improvement from -90.6% in Q4 FY25 to -11.6% in Q1 FY26
Though still negative, the near-80% improvement signals that breakeven might be within reach. For a company in the capital-heavy EV space, this is a major achievement and a key reason for the stock’s upward movement.
4. Resilience Amidst Stiff Competition
Q1’s YoY revenue decline was primarily due to slowing sales in a hyper-competitive EV market, with players like:
- TVS Motor
- Ather Energy
- Bajaj Auto
Still, Ola Electric showed sequential revenue growth — a 35% rise from the previous quarter. This bounce-back has given investors hope for recovery, particularly as the Indian EV ecosystem continues to expand with government backing and growing consumer adoption.
The stock has experienced a rollercoaster ride this year:
| Timeframe | Performance |
| Last 5 trading days | +3.5% |
| Last 1 month | -10% |
| Last 6 months | +41% |
| YTD (2025) | -50% |
| 52-week High | ₹157.40 |
| 52-week Low | ₹39.60 |
| Current Price (July) | ₹46.69 (Intraday) |
The recent 17% rally is significant, given the backdrop of an annual decline. For long-term investors, the stock’s recovery may still have headroom if operational improvements continue.
6. Market Capitalisation and Investor Sentiment
With a market cap of ₹17,740 crore, Ola Electric remains one of the most closely-watched EV players in India. The renewed buying interest may indicate that:
- Short-term correction is over
- Mid- to long-term value is emerging
Analysts are divided on its valuation, but many agree that if Ola can hit its gross margin and cost-saving goals, the stock might retest its 52-week highs in FY26.
7. The PLI Scheme & Government Support
The Indian government’s PLI scheme for EVs is another underlying driver of optimism. Ola is one of the largest beneficiaries, aiming to ramp up battery manufacturing, improve domestic sourcing, and lower import dependence.
These structural advantages align well with Ola’s goal of full-stack electric mobility, and investors are pricing in future subsidies and incentives into the stock’s valuation.
8. The Road Ahead: FY26 & Beyond
To maintain the rally and restore investor confidence, Ola Electric must:
- Sustain its EBITDA improvement into positive territory
- Hit its gross margin targets with PLI support
- Regain sales momentum and fend off competition
- Continue reducing operating costs via Project Lakshya
If these milestones are met, Ola could position itself not only as a cost-effective EV maker but also as a profit-generating disruptor in the Indian automotive landscape.
Conclusion: Why Ola Electric is Turning Heads in 2025
The sudden rise in Ola Electric’s stock price, despite dismal revenue numbers, can be credited to:
✅ Sharp improvements in cost structure
✅ Strategic execution of Project Lakshya
✅ Promising gross margin forecasts
✅ Sequential revenue rebound
✅ Sectoral tailwinds from government initiatives
While challenges remain, including intense competition and the need for consistent sales growth, Ola Electric’s focus on operational efficiency and profitability metrics has sparked renewed investor confidence.
- Why did Ola Electric shares rise despite a revenue drop?
Ola Electric shares surged due to improved profitability in its auto segment, cost-cutting measures through Project Lakshya, and a better gross margin outlook. - What is Project Lakshya?
Project Lakshya is Ola Electric’s internal initiative to reduce operational expenses. It cut monthly auto opex from ₹178 crore to ₹105 crore. - How did Ola’s EBITDA improve in Q1 FY26?
The auto segment’s EBITDA improved from -90.6% in Q4 FY25 to -11.6% in Q1 FY26, showing a strong turnaround in operating performance. - What is Ola’s target gross margin for FY26?
Ola aims to achieve a gross margin of 35–40% by the end of FY26, supported by cost reductions and PLI scheme benefits. - What is the current share price and market cap of Ola Electric?
As of July 14, 2025, Ola Electric’s share peaked at ₹46.69 intraday, with a market capitalization of around ₹17,740 crore.