Ola electric reports widened adjusted losses and sharp revenue decline in Q3

Metro India News | BENGALURU

Ola Electric Mobility Ltd, India's leading electric two-wheeler manufacturer, posted disappointing Q3 FY26 results, with revenue plunging 55% year-on-year to Rs 470 crore from Rs 1,045 crore in the same period last year. The company delivered only 32,680 units during the quarter, a steep 61% drop from 84,029 units sold in Q3 FY25, reflecting intensified competition and slower EV market growth. 

Despite the revenue contraction, the consolidated net loss narrowed slightly to Rs 487 crore from Rs 564 crore in the year-ago quarter. However, the figure widened sequentially from Rs 418 crore in Q2 FY26. Adjusted operating EBITDA losses deepened to Rs 323 crore, with the margin deteriorating to -68.7% from -47.3% a year earlier, as operational pressures mounted amid lower volumes. 

The gross margin showed improvement, rising to a record 34.3% (up 340 basis points quarter-on-quarter and significantly from 18.6% YoY), driven by the transition to the cost-efficient Gen3 scooter platform, vertical integration, and production-linked incentives. The company highlighted this as a positive from its structural reset, including a shift toward in-house cell production (with 72,418 cells produced in the quarter) and cost optimization efforts. 

Brokerages have turned increasingly bearish on the stock following the results. Motilal Oswal (referred to as MK in market commentary) maintained a negative stance, cutting its target price to Rs 20 per share from Rs  50 earlier. This implies a potential 33% downside from recent levels around Rs 30-31, casting doubts on the company's long-term survival without substantial volume recovery. 

Analysts noted that while gross margins improved due to PLA approvals for Gen3 models, the widened EBITDA loss remains a major concern. The brokerage emphasized the need for significant volume growth to achieve breakeven, especially as the overall electric two-wheeler industry grew 33% and 24% in recent months, yet Ola's market share slipped sharply to around 6%, dropping it to the fifth position in EV sales rankings. 

Ola Electric attributed the weak performance to a "structural reset" phase, including store rationalization, gross margin expansion initiatives, OPEX reductions, and a focus on achieving breakeven targets. Management projected steady-state operating expenses of Rs 250-300 crore per quarter, which could lower the monthly sales threshold for EBITDA breakeven to 15,000 units. 

The heavy capex phase is largely complete, with the Gigafactory on track for full scaling. The stock, already trading near 52-week lows, is expected to remain under pressure in the near term amid ongoing concerns over volume trends, competitive intensity, and cash burn. Market participants view the results as one of the key negative triggers in today's trading session.