Ola Electric expects its shift to a dealer-led distribution model to weigh on gross margins in the near term, even as it lowers operating costs.
Speaking during a post-quarter analyst call, Founder, Chairman and Managing Director Bhavish Aggarwal said operating margins would improve meaningfully from the third quarter onwards, although gross margins were expected to decline somewhat.
“While commodities have stabilised, our gross margin will come down a bit,” he said, adding that the company expected operating margins to improve as it moved away from its company-operated stores and expanded its dealership network.
The transition is also expected to ease working-capital requirements. Under the earlier direct-to-consumer (D2C) model, Ola had to hold inventory on its books until vehicles were sold. The dealership model would shift inventory to dealers, thereby improving its working-capital cycle, the management said.
The company also expects recent changes in GST refund rules to improve cash flows. Earlier, it could claim refunds on the raw material component of inverted-duty costs, but not on services. The expanded refund provisions, along with a 90 per cent auto-approval mechanism, could reduce refund timelines from three-four months to one-two months, management said.
Ola added that its D2C operations had complicated GST recovery, as it had to deal with multiple State governments. It estimated that 30-40 per cent of its accumulated GST receivables related to the inverted-duty structure, while some of the remaining amount would be adjusted against future business.
The company also expects to start receiving production-linked incentive (PLI) benefits from the next quarter.
Ola Electric reported a 39 per cent year-on-year decline in revenue to ₹421 crore in the second quarter. Deliveries fell to 34,667 vehicles from 52,666 in the year-ago period.
Operating expenses stood at ₹369 crore, compared with ₹390 crore in the first quarter, after excluding a one-time non-cash reversal of ₹57 crore recorded in Q1.
Published on November 13, 2026
