The Automotive Research Association of India approved Ola under the Ministry of Heavy Industries’ scheme, making the company eligible for incentives ranging from 13% to 18% of sales value until 2028. The certification applies to all seven models of Ola’s Gen 3 S1 scooters, which together account for more than half of its current sales volume.
“Securing PLI certification for our Gen 3 scooters, which form the bulk of our sales, is a critical step towards profitability. This will directly strengthen our cost structure and margins, enabling us to deliver sustainable growth,” a company spokesperson said.
With both its Gen 2 and Gen 3 lineups now certified, Ola expects the approval to substantially boost profitability starting from the second quarter of FY26. The company said the incentive will help move it closer to achieving EBITDA positivity.
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Analysts weigh in
Mandar Bhojane, senior technical and derivative analyst at Choice Broking, said Ola Electric “has confirmed a breakout and retest of its falling channel and… The price structure is constructive with a series of higher highs and higher lows, supported by strong volumes.” Bhojane noted that “dips towards Rs 52–50 should be considered healthy corrections and potential buying zones,” while a move above Rs 57 could open the way to Rs 62 and Rs 70.Drumil Vithlani, technical research analyst at Bonanza, pointed to resistance at Rs 55–58 and support at Rs 50. “The RSI near 68 suggests the stock is approaching overbought territory, raising the possibility of a short-term pullback or sideways consolidation before attempting another leg higher,” Vithlani said.Anirudh Garg, partner and fund manager at INVasset PMS, said Ola has “broken out of a year-long downtrend with strong volumes, marking an important technical shift.” Garg identified support at Rs 50–52 and resistance at Rs 58–62, with potential upside to Rs 68–70 if the stock closes decisively above that zone. “The 22% weekly gain (as much as) has shifted sentiment sharply, but the RSI hovering close to 70 highlights short-term caution,” Garg said.
Financial health
Despite the market rally, Ola’s fundamentals remain under pressure. The company reported a net loss of Rs 428 crore in the June quarter, wider than a year earlier, though narrower sequentially. Revenue halved year-on-year to Rs 828 crore, while gross margin improved to 25.6%.
At its first annual general meeting last week, Ola secured shareholder approval to reallocate IPO proceeds and extend deployment timelines, citing capital discipline and risk management. Garg called the PLI certification a “structural milestone” but warned that “execution and market share retention” remain critical.
Industry challenges and growth bets
The EV sector continues to face rare earth supply constraints after China tightened export curbs earlier this year. Ola said it has accelerated the development of motors without rare earth magnets. Analysts expect supply chain bottlenecks to ease in the coming months, which could restore balance in the market.
The company is also betting on new models such as the S1 Pro Sport, S1 Pro+ 5.2 kWh, and Roadster X+ 9.1 kWh, announced at its Sankalp event, with deliveries scheduled later this year and into early 2026.
Stock performance
Ola shares remain nearly 43% lower in 2025 and continue to trade below their Rs 76 IPO issue price. The stock is above all its short-term and medium-term simple moving averages, though it remains below its 200-day SMA.
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