Ola Electric’s Q2 FY27 financials highlight ongoing challenges with a 39% year-on-year revenue drop, persistent supply chain bottlenecks, and a strategic shift toward external dealer networks to stabilize operations.
- Q2 FY27 revenue fell 39% year-on-year to ₹421 crore amid supply shortages
- Shifted from company-owned stores to dealer-led sales to reduce expenses
- Negative free cash flow continues, with capex and GST changes impacting liquidity
What happened
Ola Electric’s operating revenue declined sharply by 39% year-on-year to ₹421 crore in the second quarter of fiscal year 2027. This revenue drop was mainly driven by supply chain disruptions, including critical component and charger shortages that throttled vehicle production and sales.
The company’s net losses narrowed by 13% to ₹362 crore due to strict cost discipline, even as its operating EBITDA loss increased 7% to ₹218 crore and gross margin slipped slightly to 29.9%. Ola Electric also transitioned away from sales via company-owned stores, opting instead for a dealer-led network to reduce costs and improve working capital efficiency.
Why it matters
The supply chain constraints underscore ongoing challenges in the Indian electric vehicle market, with component availability and commodity prices posing risks to makers like Ola Electric. The company’s aggressive cost control has helped limit losses, but output and sales volumes remain under pressure.
The pivot to a traditional dealer-led sales model marks a strategic shift aiming to boost retail velocity and preserve cash. While this approach might compress margins initially due to dealer payouts, Ola expects it to stabilize margins over time as sales channels mature and inventory management improves.
What to watch next
Ola Electric plans to uplift vehicle production to approximately 25,000 units by December as it focuses on resolving supply chain bottlenecks. Progress on this front will be crucial for improving sales momentum and overall financial health.
The company also relies on regulatory changes, such as revisions to India’s GST refund mechanism, which are expected to shorten refund cycles and unlock working capital. Monitoring cash flow dynamics and how the dealer network scales will offer key insights into Ola Electric’s medium-term stability.