Ola Electric shares fall 7% after sharp drop in quarterly revenue
Key Facts
The decline coincided with a fall in registered vehicle sales to 41,651 units from 51,775 units in the year-earlier period. These figures appeared in the results announced by the company, while Reuters cited vehicle registration data for comparison. Quarterly expenses contracted 28.4% to 639 crore rupees, which Reuters attributed to restructuring and cost-control measures. The results thus show a decline in revenue and sales volumes alongside a lower expense base.
Consolidated gross margin was 29.93% in the second quarter, compared with 30.9% a year earlier, according to Reuters. The company said it expects the margin to decline in the third and fourth quarters as it expands its dealer-store network. By contrast, the company forecast a meaningful improvement in operating margin. This trajectory makes the impact of the shift to a dealer network an important focus in monitoring upcoming results, as the expansion comes at a time when the company expects pressure on gross margin. The annual decline in sales and the lower margin also put its efforts to cut expenses and improve operating performance in context.
In its shareholder letter, the company described supply as the current constraint on its business, saying: "Demand is no longer our constraint; supply is." It added that it is working with suppliers to gradually increase capacity and production. The statement reflects management's focus on vehicle availability and the potential to raise output, alongside a decline in registered units sold in the second quarter compared with the year-earlier period. The dealer-network expansion forms part of the company's outlook for margins in the next two periods. The information provided did not specify a later date or a numerical production target.
On its investor relations page, the company reported deliveries of 34,667 vehicles during the second quarter of fiscal 2027, alongside a consolidated gross margin of 29.9%. The published delivery total differs from the vehicle registration data cited by Reuters, which recorded 41,651 units sold in the same period. These figures present two different measures of activity during the quarter, while the year-on-year comparison for registered sales remains 51,775 units a year earlier. The company expects gross margin to continue declining in the third and fourth quarters as its dealer network expands, while indicating an expected meaningful improvement in operating margin. It said work with suppliers to increase capacity and production is progressing gradually.