(Reuters) -India’s Ola Electric on Monday forecast improved gross margins for fiscal 2026 after posting a narrower sequential loss for the first quarter, helped by stronger sales of its newer, more cost-efficient scooter models.
Shares of the company, which listed in August last year, jumped over 14% after the results and were on track to snap a five-session losing streak.
The Bengaluru-based firm’s June quarter loss of 4.28 billion rupees ($49.80 million) was narrower than the 8.7 billion rupees in the previous quarter.
The SoftBank-backed firm said it expects gross margins to rise to 35% to 40% in the current fiscal year, up from 20.5% last year, and projected revenue between 42 billion and 47 billion rupees, compared to 46.65 billion rupees in fiscal 2025.
The company added that it has developed rare earth-free motors, which are set to be deployed starting the December quarter. Ola said it accelerated the program in April following global rare earth supply cuts.
China’s curbs on rare-earth exports have disrupted the global auto industry, with companies warning of a severe supply crunch. Rare-earth magnets are used are used in the motors that power electric scooters.
Ola Electric said its automotive unit posted positive earnings before interest, taxes, depreciation and amortization (EBITDA) in the month of June and expects the segment to turn positive in the second quarter.
Quarterly sales volumes came in at 68,192 units, just higher than the 65,000 units it forecast in May.
The auto segment’s gross margin rose to 25.6% from 13.8% in the last quarter.
($1 = 85.9400 Indian rupees)
(Reporting by Meenakshi Maidas, Kashish Tandon and Nandan Mandayam in Bengaluru; Editing by Nivedita Bhattacharjee)
