Good day and welcome to Ola Electric's Q1 FY 2027 earnings conference call. As a reminder, all the participants will be on the listen-only mode, and there will be an opportunity for you to ask questions after the opening remarks conclude. Please note that this conference is being recorded. Before we begin, a few quick announcements for the attendees. Anything said on this call which reflects our outlook for the future or which could be construed as a forward-looking statement, may involve risks and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements. Now, I would like to request Sri Bhavish Aggarwal, Chairman and Managing Director, and Sri Deepak Rastogi, CFO, Ola Electric, to begin the conference. To begin, first I would request Deepak to start with the opening remarks.
Thank you so much. Good afternoon, everyone, and thank you for joining for Ola Electric Q1 FY 2027 earnings call. As you are aware that Q1 marks an important point in the evolution of our business. Last year, which is financial year 2026, was a year which actually took some difficult decisions and necessary actions. We reset the operating model, streamlined the organization, tightened execution, and materially optimized our cost structure. Q1 FY 2027 was the first full quarter operating on that reset base, and the results give us confidence that these changes are beginning to translate into business performance. For the quarter, we returned to growth, gained market share, maintained strong gross margins, and did so on a significantly lower, leaner operating base. Deliveries increased to approximately 39,200 units, nearly doubling quarter-on-quarter, while orders increased to approximately 44,000.
Automotive revenue grew 72% sequentially to INR 455 crores with gross profit of INR 139 crores. Our growth materially outpaced the industry. With the broader electric two-wheeler market grew approximately 17% quarter-on-quarter, Ola registrations grew 97%, taking our market share from 5.1% to 8.4%. This growth was broad-based with sequential improvement across every region of the country, giving us a diversified base from which to scale. The second important point is the quality of the growth. Despite a challenging commodity environment, we sustained automotive gross margins at 30.5%, reflecting the underlying strength of our product economics. At the same time, we continued to optimize cost of our business. Consolidated operating expenses declined 22% quarter-on-quarter to INR 333 crores, and we remain focused on moving towards a steady-state operating cost base.
As a result, consolidated adjusted operating EBITDA improved from negative INR 326 crores in Q4 of last year to negative INR 195 crores of this quarter, FY 2027. Our objective is to grow on this leaner operating base and progressively translate incremental revenues and gross profit into operating leverage, taking us towards [crosstalk] break-even and sustainable profitability. The balance sheet has strengthened during the quarter through the successful completion of INR 780 crore QIP, giving us greater financial flexibility as we constitute the next phase of our growth. Beyond the immediate financial performance, there are few structural drivers that are increasingly important to our medium-term economics. Our 4680 NMC Bharat Cell is already commercially deployed, while 46100 LFP cell is now BIS certified and vehicle-ready.
As LFP is progressively integrated into our portfolio, we expect battery cost optimization to become an additional lever for product economics. More broadly, owning the cell roadmap gives us greater control over cost, supply, and product development. The second is monetization beyond the initial vehicle sale. We now have an installed base of more than a million customers. As this base matures, service can increasingly develop into a recurring high-margin revenue stream with our roadmap targeting service revenues of approximately INR 400 crore-INR 500 crore by 2027, 2028. We are increasingly using AI as an operating productivity layer across sales, registration, fulfillment, service, and R&D. The objective is simple: improve customer experience and execution while allowing the organization to scale without proportionately scaling cost. Finally, on the cell business, we are moving towards capabilit y creation.
From capability creation towards commercial deployment. The giga-factory is expected to be operational at six gigawatt hour by September, supporting greater own cell integration in our vehicles, as well as opportunities across energy storage and other applications. As we look ahead, our priorities are clear scale volumes with leaner cost base, drive operating leverage, deepen vertical integration, broader distribution, and life cycle monetization, and remain disciplined on capital and cash. The external environment remains supportive with electric two-wheeler penetration India crossing 10% for the first time in June of this year. For us, however, the focus remains firmly on execution . Q1 is the encouraging first proof point after the reset. We have demonstrated that Ola can grow significantly faster than the market while operating with a materially lower cost structure.
The task is to compound that progress and translate higher scale, stronger product economics, and deeper technology ownership into improved margins, lower cash burn, and ultimately sustainable profitability. With that, I would actually stop here and I will seek comments and questions from the group. Thank you so much.
Thank you, Deepak. Now we begin the question and answer session. Anyone who wishes to ask a question may use the Raise Hand option. If you wish to remove yourself from the question queue, you will get the Raise Hand option once again. Participants are requested to unmute themselves before asking the question. Before asking the question, we request you to introduce yourself with your full name and your organization. Now we wait for a moment while the question queue assembles, and then we'll begin with the question and answer.
While we wait, I just want to underline some of the comments Deepak said. It's been an important quarter, Q1. Margins were steady, still industry-leading above 30%, despite the commodities uptick. We do forecast margins to be in this range as over the next quarter or two, commodities come down, then margins will further improve again. I think the highlight of this quarter was obviously the strong top-line recovery, as well as operating cost reduction. I think Deepak highlighted it in his comments, but almost on 2X volumes, Q4 versus Q1 sequentially, our OpEx has actually come down meaningfully. OpEx in Q4 was, I think, INR 428 crores. This is total OpEx, including leases. In Q1 was INR 333 crores. In this, there was a one-time reversal of the cell ACC PLI penalties that we were taking every quarter.
About INR 55 crores or so, there was a reversal. Even if you remove that, OpEx was about INR 380 odd crores, which is meaningfully lower than the OpEx of Q4 on almost a doubling of volume. On OpEx, we continue to structurally improve our cost structure. I think over the next couple of quarters, this OpEx will come down into the INR 300-INR 325 crore range, which is where our target is. While we are doing this, we are going to keep gross margins steady to slightly growing, and volumes also steady to slightly growing. I feel from some of the challenging quarters in the past, we've now gotten a good balance in the business between growth as well as gross margin steadiness, as well as operating cost improvements. Overall, management feels very confident of the path ahead.
We have some very exciting stuff coming up on 15th August. I hope you all will be tuned to that, just in about a week from now. A couple of other things that happened in the last few days also I want to highlight, I'm sure it'll come into your questions also. Firstly, we signed our first MOU for the MahaShakti product, which is the utility scale energy storage. That will be a very meaningful growth driver for the company in the coming years. You can see from that MOU that it's high-quality renewable platforms, utilities, everybody is now engaging with us to get access to our MahaShakti product as it comes online. We will keep announcing more demand pipeline of MahaShakti as it comes online. This one was 20 gigawatt hour through the next five, six years.
I feel very confident that more and more demand pipeline will get announced. Actually, we're, like I said, speaking to everybody, demand pipeline is building soon.
Sorry about that. That's not us. Continuing with the cell business, like Deepak also mentioned, six gigawatt hour will get fully commissioned in this quarter. That's again, a good, exciting thing to look forward to. We've also been talking to companies across the spectrum to use our cell in their products, I can say that we've had very encouraging responses from global OEMs also, as well as Indian companies, especially in sectors like drones, et cetera. We will be announcing more in the coming few days, very strong. Many companies are testing our cell. Finally, just yesterday, we also announced that we have evolved our auto distribution strategy to a multi-channel strategy from a single-channel company-owned approach. I think this is also going to be meaningfully enhancing the company's growth going forward in the near term, actually.
I want to share a little bit of anecdote there before we open up. From almost the time we started this company five years ago, we've had a lot of people call in and ask for being our dealers. In the early days, just going via a dealership would have been a slower rate of growth. A company-owned strategy allowed the brand to interact directly with the customers. Whereas back in the day, four or five years ago, the whole dealer ecosystem was still a little early on automotive, on EVs. Their confidence on EVs was low. That has materially changed to a large extent. Our scale has evolved that, as well as the whole industry has grown. Now, as soon as last month or so, we've been engaging, I have personally been engaging with dealers across the country.
Their inputs and feedback has been quite unanimous and unambiguous that, Bhavish, you guys have the best product and the product portfolio. The fact that we have scooters, motorbikes, and Shakti. The dealers obviously understand the local nuances of auto retail, they feel very confident. We will actually be announcing the first set of dealerships go live with shops already set up on Janmashtami, which is early next month. Looking forward to having meaningful scale before the Diwali season hits. I feel very confident that that will bring a lot of increased top-line growth from where Q1 base is. Further ahead, we are looking at a very strong uplift from getting the best dealers to work with the company. Those are my comments on top of what Deepak said.
Just underlining, just summarizing that good quarter, good bounce back from Q4. Gross margins for us are targeting around the 30%-32% mark, which is where we wanted to be. OpEx continues to improve structurally. With that, I'll open up for questions.
Thank you, Bhavish. Thank you, everyone. We'll take the first question from Mr. Rishi Vora from Kotak Securities. Please unmute yourself and ask the question.
Hi, Rishi.
Yeah. Hi, Bhavish. Good evening. Just a couple of questions on the results and the strategy going forward.
Just first on the results, why there was a very sharp decline in the ASP on a sequential basis. Is this a product mix or something else?
Rishi, largely it's a product mix. I would put 90% of it to product mix.
Going forward, this is where it should be, or you think there can be an improvement as a motorcycle portfolio kind of ramps up?
Actually, we are seeing improvement in the product mix already from what we saw in Q1. Our premium business is also starting to grow again as overall the brand has grown from where Q4 was. motorcycle is also starting to grow in the northern plains. I don't want to hazard a forecast on product mix, but overall, I just want to say that it'll be in the, 100,000 plus or minus 5% is where it will be.
Understood. Understood. In terms of volumes, right, in one Q, we did roughly 40,000, 45,000. Is there any guidance you would like to share for full year? Like sequentially, you are talking about improvement. How do you want to exit, at least, going into the fourth quarter with more dealership onboarding and, let's say maturing of the products which you have already launched?
Rishi, we will not give a guidance or a forecast, but I'll tell you what approach we are following. Our focus is to keep growing from here on a disciplined level. Our gross margins are best in the industry, and our operating cost structure, especially for a vertically integrated business model, has become quite competitive now. Our focus is to, from where we are, keep growing in a disciplined way. Now, how much will that result in quarter on quarter? I don't want to hazard a guidance, but I do feel confident that there will be steady growth looking ahead.
Understood. Just on the cell piece, so have we started using our own cells in our vehicles? If yes, what would be the penetration? Also if you could comment on Ola Shakti, where we are in terms of revenues or any scale-up that has happened on the Ola Shakti side of things.
Our cells are only in our products, Rishi. A few thousand of them are on the roads already. In Q1, we decided to pause cell production to get the next phase installation complete. Which is, from two and a half to six. Two and a half was already installed. We produced a few hundred thousand cells, which are in production in our vehicles on the roads to customers. We have a backlog of our own cell production needed to go into Shakti as well as our auto products. Which is where we needed about two to three months of zero production time to finish the installation of the remainder of the capacity, which is now getting done sometime this month. Most likely in a week, 10 days, it will be largely done.
Then we will ramp up production of our cells again. The forecast going forward is that about three of our vehicle products out of, I think about nine or 10 SKUs, have the 4680 cell in them. They will continue to get scale as we start ramping up production with the full 6 GWh capacity . On Shakti.
Just in terms of.
On Shakti?
Yeah.
Shakti also, we will be announcing the Shakti Gen 2 on 15th August, which will be with LFP cells. Shakti Gen 1 was with NMC cells. With NMC, we decided that we just wanted to put out enough so that we learn about the category, but not really scale too much because as you can understand, NMC is costlier than LFP, and gross margins on that Shakti were not to the target level. With Shakti Gen 2, which is with LFP cells, our gross margins are going to be actually even healthier than our auto segment. That gets announced on 15th August. On 15th August, actually, we'll be sharing more details about MahaShakti, about Shakti, as well as Other formats of Shakti which will go into the C&I space, commercial and industrial space, including data centers, et cetera.
All of that gets rolled out starting this quarter.
Was there any meaningful contribution of Ola Shakti this quarter in terms of revenues b ecause of the or something?
No. We delivered a few hundred, then we decided not to scale up the NMC-based Shakti, but pivot to the LFP-based Shakti. Another good news in that direction was in this quarter, our LFP cell got BIS certification also. Our LFP program proceeds very well.
Understood. Just last two questions. One is, what is the CapEx plan for this year? How much we have incurred in one Q? Secondly, why depreciation also was down on a sequential basis. Was there any write-off which you had taken which led to this decline in depreciation?
Rishi, our CapEx is, if you can see in our auto business, there's hardly any CapEx now. You can see in this quarter also, our free cash flow and operating cash flow is pretty much, there's no gap, right. Auto does not need any CapEx for the foreseeable years because our factory is scaled up to a million units a year already. Not just million units, but it's a vertically integrated factory. We can really produce for a while. Our cell factory also is finishing its CapEx cycle this quarter with 6 gigawatt hour installed. We don't foresee any more CapEx after that. Even that CapEx is all funded through debt. The equity contribution is largely done. No more CapEx for the foreseeable future is my guidance to you guys. On depreciation.
Depreciation, we have evolved a little bit of our depreciation policy, in sync with the industry standards. There were some areas where we were depreciating very aggressively. We've just brought that to industry standard. That's the INR 1,0, 20 crores delta you see.
Understood. Sorry, again, just clarification on the CapEx. There would be also some bit of R&D you would be capitalizing, right? Any R&D targets which you would be sharing?
No targets, Rishi. We'll capitalize a minority of our R&D spends, not a large part.
Understood. Any quantum overall, just lastly, sir, any quantum on target?
Sorry to disturb, Rishi.
Sorry. I'll call back in again. Okay.
In the interest of time, we'll be taking questions from the rest of the participants. Thank you, Rishi. We'll take the next question from Mr. Akshay Satija from Alpha Investco. We request you to kindly unmute yourself and ask your question.
Hi, Akshay.
Hey, Bhavish. Hi. Thank you for the opportunity and congratulations on lowering the costs. Bhavish, what I wanted to understand more is on the cell side. I wanted to understand what would be the LFP side of the business, what would be towards the NMC. Is there any clearance like we've decided for this?
Akshay, good question. We see ahead, a large part of our business will be LFP. Almost all of Ola Electric's auto business will move to LFP soon enough. Hold on till the end of the month. We will have some good announcements there. NMC in our auto business, about 20% of our portfolio will be NMC based, which will be higher performance or the top end of the range will be NMC based. Otherwise, everything else will move to LFP. All of Shakti and MahaShakti, which is the energy storage business, will be LFP based. NMC will also be relevant for some niche categories like drones, et cetera, where people have already shown a lot of interest in our NMC cell. Many of them are actually trialing it out, and we will talk about that soon.
Okay. Yeah, we earlier had plans of scaling the capacity up to 20 gigawatts. Just want to confirm, is it still on the cards or what are we thinking on those terms?
The plan there is six gigawatt hour will be the cylindrical capacity, six to 20 will be prismatic. Our R&D on our prismatic cell is already underway, we expect it to complete by end of this year. At that point, we will aim to scale from six to 20, only by getting equity into the cell company. We will not use any parent entity equity to go from six to 20. No, we will raise separate equity for that at the right time.
Okay. That we plan to do in 28th, 29th, any?
No, no, 27. In 27, we will [audio distortion] .
Okay. Could you also throw some light on what yields we saw on the capacity when we actually brought it down? We stopped it for a few period. What yields that we saw? Because what I believe is, it is only commercially viable if we can produce at 90% or higher yields.
Akshay, our yields are in the, let's say high 70s or 80% range when we paused it. There is a clear roadmap to go from there to 90+% within a quarter of restarting it, which is when, later this month, we will restart production after the full installation is done.
Okay. We can see numbers from battery business from Q3 onwards. Is that's what you're saying, right?
Yes, absolutely.
Okay. On the scooter business, we still see some service issues in terms of availability of parts. Just want a broad understanding from you, what is it that's caused that problem? Is it vendor side or the numbers not going in certain amount? Just want to understand perspective and picture from your side on that.
Most of the service challenges are now behind us, Akshay. You're right, it was largely linked to availability of parts, not really a very large need for service. Whenever parts were needed, they were in less supply, especially a few critical parts where we did have some vendor challenges, including the challenges linked to the macro geopolitical situation. We are navigating that. There are no challenges which are material on parts supply chain, but there are a couple of things which we monitor very closely on parts supply. Going forward with the dealer model, the difference will be that the dealer will actually just stock the parts and buy it from a cash and carry basis. That challenge will be much lesser there from the dealer side of the sales network.
Correct. When you say vertically integrated for the scooter business, could you specify a little more in terms of what all is manufactured from motors, MCUs, BMS?
Yeah. Some electronics, motors, the frame, the paint, the battery pack, the wiring harness, a lot of the fabrication, et cetera, all of this is done in-house.
Okay. Perfect, Bhavish. That answers my questions. Thank you so much for the explanations.
Thank you, Akshay. We'll take the next question from Mr. Purvesh Patel from Akasha Capital. We request you to unmute yourself and kindly ask the question.
Hello. Good evening. Sir, can you tell what is the expected timeline of transitioning to in-house manufactured cells for entire Ola Electric portfolio?
Purvesh, we have not put anything publicly out there, like I said, let's assume by the end of this year, most of our vehicles will be on our cell. I don't want to really give a very hard guidance on that.
Thank you.
Thank you so much, Purvesh, for the question. We wait a couple of minutes.
Rishi. I think Rishi has a follow-up, we can finish Rishi.
Sure. Rishi, if you have a follow-up question, we'd love to take your questions . Hi, Rishi. We request you to unmute yourself and ask the question.
Yeah, sorry. I was muted from your side. Just two things from my side. Again, just clarification on the CapEx. Well, you said that there is hardly any CapEx, any number, like it would be INR 100 crores, INR 200 crores for this year, which you will be doing, or it even won't be to that extent?
Rishi, except for this cell project, which is just getting done, beyond that, CapEx will be maybe INR 30 crore-INR 50 crore. INR 50 crore you can take a direct number.
Understood. Just on the cell side of things, when you said that from third quarter we'll start seeing contribution, obviously one piece is where we'll be internally using it in our own.
No, we'll see sales from Shakti also in the market with the LFP cell. We will also see hopefully, I think either Q4 or Q3, we will start seeing some early revenue from MahaShakti also.
Understood. That you will be commencing supplies to Axis Energy or it's somebody else?
I won't be able to share that on this call.
Understood. Just on the dealership, so currently, can you just help us with how many touch points we have and let's say by festive or by end of 3Q. How many dealers we would like to appoint as a new strategy? Just at a higher level, what prompted us to change our go-to strategy from company-owned dealership to someone from outside.
You know the answer. I know [audio distortion] I will still engage you and answer, okay. See, the auto retail obviously has a lot of local nuances. We’ve also learned that along the way. The way we started as a brand would not have been possible with a dealer-only channel outreach because you followed us very closely. We had a very strong start to our journey. It’s a five-year-old company only. That said, as scale happened, and by the way, we still have the largest number of cumulative two-wheeler EVs sold in the country, so we have the largest customer base even today. As we scaled, we realized that the local nuances of auto retail, customer engagement, the servicing, et cetera, management of the shop, a dealer can do much better at scale. Hence we pivoted.
The strategy now is that company stores will become more like experience centers. You can imagine bigger, higher quality of resources That kind of stores, and hence, over time, fewer in number. Dealer stores will become the backbone in terms of volume and transaction and service, et cetera. That’s now the way we are thinking of growing. We’ve gotten phenomenal interest, Rishi, last two days that we’ve publicly announced it, and even before that we’ve been engaging with about 20, 30 dealers for about a month now. We have got almost 1,000 people interested in talking to us. It’s more than actually that our team can process right now. Our goal is to select good ones, high quality ones. We’ve also, by the way, gotten back BVR Subbu, who used to be a board member before we went public.
He’s even then been engaged with the company. He understands all the key dealer ecosystem people. He is actually helping us select the right people. It's a matter of selection, actually, for us right now. The proposition for dealers is very, very strong, as they see it and as we are engaging with them. Firstly, we have a very large customer base, and dealers really believe in service revenue. If you can see, we have a large number of EV two-wheeler vehicles out of warranty period also, the three-year warranty period. All our Gen 1 vehicles are out of warranty. Dealers find a lot of potential in that. Second, our product portfolio is the broadest. We have scooters, both premium and mass. We have motorbikes, and we have Shakti also.
We have a few upcoming products which we have shared in confidence with some dealers. The product portfolio for them also is very strong. We are not a new brand which is not known, and hence dealers find strength and value in that also. That Ola is a very well-known brand. Obviously there are questions that, "Oh, has the brand, in the last few quarters, been lower?" Obviously, it has been lower, but they also see the resurgence. The really good dealers see the strong product pull that our brand has. The challenge on service, obviously, the dealer feels that they can address it much better. We feel it's a very strong path ahead, a very relevant pivot.
In the overall scheme of things, I think this will end up making meaningful difference to both our scale over the next few months, but also industry penetration.
Sorry, any numbers you would like to share? Today we have around 500 touchpoints, if I'm not mistaken. Any target you have for dealership counts by the end of this calendar year?
We won't be sharing a number, Rishi. I said [crosstalk] through my comments, I said that the first bunch will go live on Janmashtami, which is, I think, 4th September.
Understood. Just lastly, on this Ola Shakti, because we would be selling it through our own experience centers and dealers. Is there any different go-to strategy, go-to market strategy you're thinking about? Because it's more distributor-led sales that happens, right?
Good question.
Is there any thought process?
We are doing with Ola Shakti from day one, we have been and we will increasingly as we scale supplies, we're doing a multi-channel strategy. It'll go through our own company stores. It'll go through our automotive dealers also. There are other industry specific channels for that kind of inverter or battery business as the typical parlances. We are signing up the traditional channel also for that.
Understood. Okay. Thank you so much and all the best.
We've learned to maximize channel strategy.
Thank you everyone. In the interest of time.
Actually, no. We'll take Udit's question. Udit is a person I know. Udit, do you have a question to ask?
Good evening, Bhavish.
Hi.
Hi. Congratulations to you and the entire Ola Electric team on the progress this quarter. My question is on the recently announced Axis Energy partnership. While the MoU is an exciting validation of Ola's energy ambitions, could you help investors understand the scale of the opportunity? How should we think about the revenue potential commercialization timeline and the broader pipeline for similar enterprise partnerships over the next few years?
No, good question, Udit. I believe the energy storage opportunity is going to be massive for India and for our company also. Actually, the CEA estimate, the government body, the CEA report had an estimate of 400 gigawatt hour in about five, six years, I guess. I think that's an underestimation of what India will need. Energy storage will be deployed across the grid level, home level, everywhere. Energy storage is going to be everywhere. We have a very strong advantage in terms of coming to market with a vertically integrated product early enough. Our engineering strength really helps us deliver a good proposition to customers there. The customers there care about things that a high quality engineered product like ours can deliver.
For example, our product will have better round trip efficiency, because in all the automotive technology that we have used to optimize range, and you know that our range, by far, is the best for the same kilowatt hour battery pack.
Absolutely.
Software, the wiring harnesses, everything we are bringing into Shakti also. The round trip efficiency will be a few points higher than what industry offers. Safety is another paradigm. Our safety will be higher. How much energy put into one container, I think industry standard right now is five megawatt hour in the container. I don't want to take the thunder away from 15th August, but ours will be higher than that. We are very confident of our proposition, and the market is going to be immense.
Yeah, that's great to hear. The other question is in regards to Roadster. Just wanted to understand what is the total contribution of Roadster bike in your total revenue. I mean, the total count of vehicles sold.
Udit, Roadster is, for us, still a minority contribution. A small minority still. Scooters is the majority. Roadster, we've gotten good response to the product. People are really interested in the higher range product, which is our 9.1 kilowatt hour. We haven't been able to supply enough because of the 4680 supply cell shortage because we want to finish the installation. Even in this quarter, if you see our orders to our deliveries were slightly lower because the 4680 cells, vehicles will need to get delivered over the course of this and the next quarter. As availability of the higher range Roadster increases, I think people will really start adopting motorbikes.
Okay. Yeah. Those were my two questions. Thank you so much.
Thank you, Udit. With this, we come to the conclusion of the session here. We appreciate your time and all of your questions during the call today. Thank you so much for joining us, and we look forward to meeting all of you during our next earnings conference call. You may now log off the conference call. Good evening.