Ola slashes revenue guidance by a third, looks beyond two-wheelers for growth

Bhavish Aggarwal-led Ola Electric Mobility Ltd has cut its 2025-26 revenue expectations by a third to ₹3,000- ₹3,200 crore, just three months after it guided for ₹4,200- ₹4,700 crore, on falling two-wheeler sales.

The company, which reported revenue of ₹4,514 crore in the last fiscal year, expects its battery energy storage system (BESS) business, Ola Shakti, to provide a ₹1,000 crore cushion in 2026-27 amid falling income from the two-wheeler business.

In the September quarter, its loss narrowed to ₹418 crore from ₹495 crore in the year-ago period. Its revenue saw a 42% slump to ₹756 crore.

The downward revision follows the company’s September announcement that its board had approved a ₹1,500 crore fundraise.

Compared to upper band of earlier guidance, the new estimate is down 32% while compared to the lower band of the earlier guidance, it is down by 29%.

Fight for territory

A 47% year-on-year drop in second-quarter registrations to 50,372 units saw the company lose market share to rivals such as Ather Energy and legacy players TVS Motor Co. and Bajaj Auto, according to Vahan portal. It ranked fourth in the list of Indian electric two-wheeler makers, with Ather jumping to the second position by selling 52,597 units in the three months ended 30 September. TVS topped the list with 69,195 units.

It ranked fourth in the list of Indian electric two-wheeler makers, with Ather jumping to the second position by selling 52,597 units in the three months ended 30 September. TVS topped the list with 69,195 units, while Bajaj ranked third with 51,120, according to data from the Vahan portal.

“Our competitors are buying market share through pricing, discounts, and channel incentives,” Aggarwal, Ola Electric's chairman and managing director, said during the second-quarter earnings call on Thursday.

He suggested that Ola Electric would instead focus on delivering profitability, with its automobile business achieving earnings before interest, tax, depreciation, and amortization (Ebitda) breakeven in the quarter.

“Our strategy is strategically sound as we want to focus on consolidating our business to deliver profitability,” he told analysts and investors in attendance.

Meanwhile, the company is working to expand its cell business by adding capacity at the lithium-ion gigafactory in Tamil Nadu. According to Aggarwal’s letter to shareholders, the company will expand the capacity of its cell factory to 5.9GWh by the end of the 2025-26 fiscal year, up from 1.4GWh at the start of the fiscal year.

This capacity will be expanded to 20GWh by the end of the next fiscal year, as originally planned when the company announced the construction of the gigafactory in 2023.

However, in July, it announced that it would not expand beyond a 5GWh capacity until fiscal year 2029, as the existing capacity was sufficient to meet demand for its automobile business.

Energy pivot

The pivot towards the energy storage business has prompted management to return to its original plan of expanding to 20GWh.

Ola aims to diversify its revenue stream beyond the sale of electric scooters and motorcycles with the energy business.

“Over the next few quarters, our revenue mix will progressively expand beyond automotive, driven by the ramp-up of our energy products,” Aggarwal said in the letter.

He said the products unveiled in September will start selling from January 2026, with the company keeping a ₹100 crore target in mind for the March quarter.

“The products are targeting the large inverter market of the country. These are also linked to the installation of rooftop solar as they require inverters,” he added.

Expanding on the business case in his letter, he noted that the BESS business is closely tied to developments in the global energy markets.

“Globally, energy security and localization of supply chains are driving the same shift: renewable generation must be matched with storage. Battery storage is therefore the next critical layer of the energy system, and our gigafactory positions us to play a leading role in building that capability for India and the world,” the letter said.

Ola Electric’s shares fell 4.95% during trading hours on Thursday against a 0.062% rise in the Nifty Auto.