Ola Electric Mobility Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Ola Electric reported a strong Q3 FY26 with consolidated revenue of ₹470 crores and a record gross margin of 34.3%, driven by vertical integration and cost optimization. The company has completed its major Capex phase for current capacity and significantly reduced quarterly OPECs, lowering its EBITDA breakeven to ~15,000 units per month. While acknowledging service challenges that impacted sales, management is focused on recovery and expects to fully institutionalize service within the next quarter, positioning the company for future growth.

Highlights

  • Consolidated revenue reached ₹470 crores in Q3 FY26.

  • Achieved highest ever consolidated gross margin of 34.3%, marking a 16 percentage point increase year-on-year and 3.4 percentage points quarter-on-quarter.

  • Q3 deliveries stood at 32,680 units, with ~72,500 cells produced.

  • The heavy Capex phase is largely complete, with approximately ₹5,300 crores invested across manufacturing, battery innovation, and R&D, supporting 1 million vehicles and 6 gigawatt hours of cell capacity.

  • Quarterly OPECs, including leases, reduced significantly from a peak of ₹840 crores to ₹484 crores in Q3, leading to a structurally lower EBITDA breakeven of ~15,000 units per month.

Concerns

  • Service challenges have impacted brand trust and sales, requiring further institutionalization over the next quarter.

  • EV penetration growth is slowing down, and the industry is entering a more mature phase.

  • Employee costs showed a sharp increase this quarter, though management attributes this to one-off exits and expects benefits in the coming quarter.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹470 Cr
  • Consolidated Gross Margin
    34.3%
    YoY +16% QoQ +3.4%
  • Deliveries
    32,680 units
  • Cell Production
    72,500 cells
  • Quarterly OPECs (including leases)
    ₹484 Cr

FY26

  • Warranty Provisions
    2%

What they filed

Q1 FY27: revenue down 45.0%, net profit up 21.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,214 1,045 611 828 690 −43%470 −55%265 −57%455 −45%
EBITDA-379 -460 -695 -237 -203 +46%-271 +41%-281 +60%-165 +30%
Net profit-495 -564 -870 -428 -418 +16%-487 +14%-500 +43%-336 +21%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Manufacturing, battery innovation, and R&D ₹5,300 Cr
    Over the last few years, we have invested approximately ₹5,300 crores across manufacturing, battery innovation and R&D. This has created full vertical integration across motors, batteries, cells, electronics, and software along with scalable manufacturing infrastructure and a strong product roadmap. The heavy Capex phase, which we have been investing so far, is behind us now. Our current footprint supports 1 million vehicles and 6 gigawatt hour of cell capacity and the focus now shifts to scaling into this capacity.

Guidance & targets

Margin

  • Consolidated Gross Margin Margin · FY26-27 · High confidence 35% to 40%
    We continue to see gross margins stabilizing in the range of 35% to 40% during the financial year 26-27.

    — Mr. Deepak Rastogi

  • Gross Margin Margin · FY27 · High confidence 35% to 40%
    And we still see through FY27, this gross margin going between that 35% to 40% range.

    — Mr. Bhavish Aggarwal

Revenue

  • Revenue Potential from Current Capacity Revenue · future · High confidence ₹15,000 to ₹20,000 crores
    the revenue potential is about 15,000 to ₹20,000 crores.

    — Mr. Bhavish Aggarwal

Warranty

  • Warranty Provisions Warranty · current financial year · High confidence 2-3%
    the warranty provisions for the current financial year are expected in a range of 2-3%, which is among the lowest in the Indian EV industry.

    — Mr. Deepak Rastogi

Opex

  • Quarterly OPECs (steady state) Opex · next couple of quarters · High confidence ₹250 to ₹300 crores

    Previously ₹484 crores → ₹250 to ₹300 crores

    Consolidated quarterly OPECs, including leases, reduced from ₹840 crores at peak expansion to ₹484 crores during this Q3 and we expect steady state between, give or take ₹250 to ₹300 crores over the next couple of quarters.

    — Mr. Deepak Rastogi

  • Clean Cost Structure (OpEx benefit) Opex · Q4 and Q1 · High confidence visible
    So, in that direction these two quarters have some of these one-off costs, so you don't see the clean cost structure yet. You'll start seeing it in Q4 and you'll see more of it in Q1.

    — Mr. Bhavish Aggarwal

Breakeven

  • EBITDA Breakeven Units Breakeven · ongoing · High confidence ~15,000 units per month
    At this level, our EBITDA breakeven reduces to approximately 15,000 units per month, with 85% or 90% of OPEX being fixed cost, which means we would have to just put in some incremental fixed cost, when we actually grow our business over time, which actually will drive a very, very strong margin through this.

    — Mr. Deepak Rastogi

Service

  • Service Institutionalization Service · another quarter or so · Medium confidence fully institutionalize service
    It will take us another quarter or so to fully institutionalize service.

    — Mr. Bhavish Aggarwal

Capacity

  • Cell Capacity Capacity · March 2026 · High confidence 6 gigawatt hour
    We are currently at 2.5 gigawatt hour install capacity, scaling to 6 gigawatt hour by March 2026.

    — Mr. Deepak Rastogi

What to watch in Q4 FY26

Service Institutionalization

next quarter or so
Current meaningfully improving; backlogs reduced from 14 to 7-8 days; 80% tickets completed same day
Target fully institutionalized service

Why it matters

Full institutionalization of service is key to rebuilding brand trust and driving sales recovery, directly impacting future volumes and profitability.

But as a result of our cost improvements and the structural operational model improvements, we've actually been able to create enough headroom and a lower breakeven point. So as we improve our service and as sales recover, we will see a faster roadmap to profitability. ... It will take us another quarter or so to fully institutionalize service.

Risks & concerns

  • Service challenges impacting brand trust and sales

    high

    Execution gaps in service have impacted brand trust and led to lower sales in recent quarters, requiring significant effort to recover.

    Management acknowledged

  • Slowdown in EV penetration growth

    medium

    The EV industry's penetration growth has slowed, and the market is entering a more mature phase, requiring new strategies to educate 'follower' customers.

    Management acknowledged

  • Time required for brand trust recovery

    medium

    While service improvements are underway, brand trust will take time to recover, which could delay sales recovery.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Sales aspirations and breakeven timeline Partial
Arvind, we will not be giving a time target of when we will get to either 15,000 a month or higher. But I want to say that we acknowledge the service challenges, we have to solve them, brand trust will take some time to recover.

Analyst pressed for a timeline to reach the stated breakeven volume, but management avoided giving a specific date, emphasizing service recovery instead.

Asked by Mr. Arvind Sharma - Citi

Increase in employee costs Evasive
No, I think, Arvind, I will take this question offline because we do not see the way you are looking at the data right now. So, we can take this question offline and then obviously resolve the query, if there are any, which are basically there.

Analyst highlighted a significant increase in employee costs, which management initially attributed to one-off exits, but the CFO then offered to discuss offline, suggesting a potential discrepancy or complexity.

Asked by Mr. Arvind Sharma - Citi

Capex completion and Gigafactory expansion Direct
Our Phase-1 in that was 5 gigawatt hour, which will be done with this. ... for our business priorities, we don't expect any more gigafactory expansion as far as the current roadmap goes.

Analyst sought clarification on whether the heavy Capex phase is truly over and if the planned 6 GWh capacity is sufficient, which management confirmed, providing clarity on future capital expenditure.

Asked by Mr. Arvind Sharma - Citi

Triggers for the next leg of EV growth Direct
The reality is the benefits of EV are very strong. OpEx savings, 90% lower cost of operations and for the 2-wheeler customer that matters in a meaningful way. So, this next level of a customer, which is a follower customer, needs more education and marketing of that.

Analyst questioned the plateauing EV adoption, and management outlined their strategy to educate 'follower' customers on EV benefits and improve service to drive future growth.

Asked by Mr. Eshan Bhargava - Bank of America

Confidence in revised OpEx targets Direct
So, Eshan, the actions that we've taken are written there, so I'll not go over that again. But a lot of those actions have been taken towards the end of Q2 and Q3. So, in that direction these two quarters have some of these one-off costs, so you don't see the clean cost structure yet. You'll start seeing it in Q4 and you'll see more of it in Q1.

Analyst challenged the aggressive OpEx reduction target, and management explained that the benefits of actions taken in Q2/Q3 would become visible in Q4 and Q1, providing a timeline for verification.

Asked by Mr. Eshan Bhargava - Bank of America

Leveraging structural efficiencies for financial performance Direct
I think the fundamental answer is what's covered in the letter that because we are a vertically integrated operations, both on the backend and the front end, and our backend, which is the manufacturing and R&D and supply chain, is so efficient because for the last 4-5 years we've been hammering away at it and we have three generations of our platform, we have 2 factories built out.

Analyst inquired about how the company plans to leverage its structural efficiencies, and management reiterated the benefits of its vertical integration and efficient backend operations on gross margins and OpEx.

Asked by Mr. Arun Kejriwal - Kejriwal Research & Investment Services

Management's worries Direct
You know, we have done a lot of good things in this company. We have built a lot of strengths, which is not going to be easy for industry to catch up on. So, you know, our competitive positioning is not really of concern or a risk to us. Today, the numbers are low but that is because of the fundamental loop of delivering good service and, hence, letting the product shine.

Analyst asked about management's key concerns, and management clarified that competitive positioning is not a worry; instead, the focus is on resolving service issues to allow the product's inherent strengths to drive sales.

Asked by Mr. Arun Kejriwal - Kejriwal Research & Investment Services

2 min read 6 chapters

Detailed narrative

Strong Q3 Performance and Margin Expansion

Ola Electric delivered a consolidated revenue of ₹470 crores in Q3 FY26, achieving its highest ever consolidated gross margin of 34.3%. This represents a significant 16 percentage point increase year-on-year and a 3.4 percentage point increase quarter-on-quarter. The company reported 32,680 deliveries and produced approximately 72,500 cells during the quarter, reflecting the strength of its vertically integrated model and Gen 3 platform economics.

Cost Optimization and Reduced Breakeven

The company executed a comprehensive operating model reset, leading to a substantial reduction in consolidated quarterly OPECs (including leases) from a peak of ₹840 crores to ₹484 crores in Q3. Management expects OPECs to stabilize between ₹250-300 crores over the next couple of quarters. This cost optimization has lowered the EBITDA breakeven point to approximately 15,000 units per month, with 85% to 90% of OPEX being fixed cost, indicating improved operating leverage.

Capex Cycle Completion and Capacity Scaling

Ola Electric announced the completion of its heavy Capex phase, having invested approximately ₹5,300 crores over the past few years in manufacturing, battery innovation, and R&D. The current footprint supports 1 million vehicles and is scaling to 6 gigawatt hours of cell capacity by March 2026. This positions the company with significant headroom and no new Capex requirements are anticipated until further growth necessitates it, with a revenue potential of ₹15,000 to ₹20,000 crores from existing capacity.

Addressing Service Challenges and Brand Trust

Management openly acknowledged service challenges that have impacted brand trust and sales. However, they emphasized that these are service scale issues, not product quality issues, with independent surveys indicating over 90% product satisfaction. Through a 'hyper service initiative,' service backlogs have been reduced by nearly 50%, from 14 days to 7-8 days, and 80% of service tickets are now completed on the same day. The company expects to fully institutionalize service within the next quarter or so to rebuild brand trust.

Gigafactory Operationalization and Technology Roadmap

Q3 marked a key milestone with the doubling of cell production to ~72,500 cells and the first commercial deployment of in-house 4680 Bharat cells. Ola Electric is the only Indian company to have operationalized a Gigafactory, which is ramping up. The company highlighted a cell technology roadmap from 4680 to 4600 and then to 46120, promising increased energy density and faster charging performance with each generation, similar to the gross margin improvements seen in their automotive business.

Future Outlook and Strategic Strength

The company believes its vertical integration and technology leadership provide a significant competitive advantage, with gross margins expected to stabilize in the 35-40% range through FY27. Management stated that competitive positioning is not a concern, and the focus is on solving service challenges to allow the product's inherent advantages to drive sales recovery. The Gigafactory is also seen as a strategic asset for future growth in the broader energy storage market, beyond just automotive.

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