HSBC has raised its target price on Ola Electric to ₹49 from earlier levels, following a positive surprise in gross margin during Q1FY26. The brokerage continues to maintain a ‘Hold’ rating, noting that concerns around long-term margin sustainability persist.
Ola’s Q1 results showed a 50% YoY drop in revenue to ₹828 crore and a net loss of ₹428 crore. However, the company’s gross margin came in significantly better than expected, largely due to improved cost structure and operational efficiencies. EBITDA loss was reported at ₹237 crore.
While welcoming this margin performance, HSBC expressed caution around the eligibility of Ola’s battery cell manufacturing unit for PLI incentives, which could impact long-term profitability. The company’s FY26 guidance of 35–40% gross margin and volumes between 3.25–3.75 lakh units were seen as ambitious but achievable if execution remains tight.
HSBC concluded that while Ola’s recent performance is encouraging, investors should await more clarity on long-term structural tailwinds—including demand visibility, government incentives, and sustained product competitiveness.
