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Shares of India's Ola Electric rise as forecasts show margins improving

India's Ola Electric forecast improved gross margins in fiscal 2026, after posting a smaller sequential loss for its first quarter. This was helped by the stronger sales of their newer, cost-efficient scooters.

After the results, the shares of the company that was listed in August, last year, rose over 14% and were on course to end a five session losing streak.

The Bengaluru-based company's loss for the June quarter was lower than the 8.7 Billion rupees of the previous quarter.

SoftBank-backed company said it expected gross margins to increase to 35%-40% in the current financial year. This is up from 20,5% last year. Revenues are projected to be between 42 billion to 47 billion rupees compared to 46.65 million rupees for fiscal 2025.

The company also announced that it had developed motors free of rare earths. These are expected to be used in the first quarter of December. Ola announced that it had accelerated its program in April after global shortages of rare earths.

China's restrictions on rare earth exports have

Disrupted

Global auto companies are warning about a severe shortage of parts. In the motors of electric scooters, rare-earth magnets have been used.

Ola Electric's automotive unit reported positive earnings before taxes, depreciation, and amortization in June. The segment is expected to be positive during the second quarter.

The quarterly sales volume was 68,192, which is just a little bit higher than the 65,000 unit forecast in May.

Gross margins in the auto sector rose from 13.8% to 25,6% during the previous quarter.

(source: Reuters)