Ola Electric's stock drops 5% as a decline in revenue overshadows a smaller Q3 loss

Shares of Ola Electric Mobility declined sharply on Monday after the electric two-wheeler maker reported its December quarter earnings, reflecting continued pressure on revenue despite improved margins and lower losses.

The stock fell 5.21% to ₹29.28 during intraday trade on the NSE. On Friday, shares had closed nearly flat at ₹30.89, down 0.26%.

Loss Narrows, But Revenue Slumps

For Q3FY26, Ola Electric posted a net loss of ₹487 crore, narrowing from ₹564 crore in the same quarter last year. Adjusted operating EBITDA losses also improved significantly to ₹323 crore compared with ₹494 crore a year ago.

However, revenue from operations dropped 55% year-on-year to ₹470 crore, reflecting slower EV adoption and weaker volumes during the quarter.

“Structural Reset” Underway

In its Shareholders’ Letter, the company described the quarter as a “structural reset,” stating that it has realigned its retail footprint, cost structure, and operating model. Management emphasized a shift in focus toward strengthening core fundamentals rather than chasing short-term sales volumes.

According to the company, this recalibration has lowered its volume breakeven point structurally and improved operating leverage.

Margins Hit Record High

Ola Electric reported a record consolidated gross margin of 34.3% in Q3, expanding 15.7 percentage points year-on-year and 3.4 percentage points sequentially. The margin improvement was driven by vertical integration, benefits from its Gen3 platform, and tighter cost discipline.

The company reiterated its guidance of achieving gross margins in the 35–40% range by FY27.

Heavy Capex Phase Nearing Completion

Ola Electric said it has invested approximately ₹5,300 crore in manufacturing infrastructure, battery innovation, and R&D platforms—calling it one of the largest EV-focused investments among Indian OEMs.

Its heavy capital expenditure cycle is largely complete, with the final phase of its Gigafactory expected to conclude by March 2026. The company currently has a manufacturing capacity of 1 million vehicles and 6 GWh of cell capacity.

Going forward, the focus will shift toward scaling revenues to an estimated ₹15,000–20,000 crore over the next few years.

R&D Investments and Technical View

The company highlighted that its ₹2,000 crore investment in R&D has matured into a Gen3 architecture platform designed to deliver improved product quality, stronger unit economics, and sharper differentiation.

On the technical front, the Relative Strength Index (RSI) for the stock stands at 35.8, indicating it is nearing oversold territory. An RSI below 30 typically signals oversold conditions, while a level above 70 suggests overbought levels.

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