Ola Electric Q3 Results FY26: Revenue Plunges 55% to ₹470 Crore, Loss Narrows but Stock Falls 7%
Mumbai, India — Shares of Ola Electric Mobility Ltd slipped sharply as the company released its third-quarter financial results for FY26, painting a mixed picture of narrowing losses but a steep 55% decline in revenue and a dramatic 61% drop in deliveries that has left investors cautious and the stock trading near multi-month lows.
The numbers highlight just how challenging the environment has become for one of India’s most high-profile electric two-wheeler manufacturers, despite some bright spots in margin performance and cost control.
Big Revenue Drop Despite Smaller Loss
For the three months ended December 31, 2025, Ola Electric reported consolidated revenue from operations of ₹470 crore, a 55% year-on-year decline from the ₹1,045 crore recorded in the same quarter a year earlier. This drop was significantly steeper than many analysts had anticipated, driven by a steep slump in vehicle deliveries and weak demand conditions across the electric two-wheeler segment.
On the positive side, the company managed to narrow its net loss for the quarter to ₹487 crore, compared with a ₹564 crore loss in Q3 FY25—representing an improvement of about 13–14% year-on-year. However, losses widened sequentially from the ₹418 crore reported in the prior quarter, underscoring ongoing pressure on profitability amid compression in volumes and reduced operating leverage.
Demand Weakness and Slower Volumes
One of the sharpest indicators of trouble was the collapse in deliveries. Ola Electric shipped only 32,680 two-wheelers in Q3, down a dramatic 61% from the 84,029 units delivered in the year-ago period. This steep fall mirrors wider industry softness and reflects greater competition from established rivals such as Ather Energy, TVS Motor, and Bajaj Auto, all of which have aggressively expanded their electric vehicle portfolios.
The drop in volumes directly affected revenue, as fewer scooters on the road meant:
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Reduced sales income from vehicle purchases
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Weaker aftermarket revenues from service and accessories
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Lower economies of scale in manufacturing and procurement
Premium scooter deliveries fell even more sharply, declining nearly 79% year-on-year, while mass-market volumes also halved, indicating broad-based weakness across the product portfolio rather than isolated performance issues.
Margins: A Silver Lining
Not all of the quarterly data was negative. Ola reported a consolidated gross margin of 34.3% for Q3, the highest in the Indian electric two-wheeler industry. This represented:
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An expansion of about 15.7 percentage points compared with the same period last year
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A moderate increase from the previous quarter
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Industry-leading unit economics despite volume challenges
Management attributed this improvement to:
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Tighter cost control across operations
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Deeper vertical integration reducing dependence on external suppliers
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The economics of its Gen3 platform, designed for improved manufacturing efficiency
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Rationalization of retail footprint and operating expenses
Despite margin gains at the gross level, EBITDA losses widened sequentially, reflecting that even as unit economics improved, fixed costs and operating expenses remained significant given the sharp drop in sales volume. Operating leverage deteriorated, and adjusted EBITDA losses increased compared with the previous quarter.
Market Reaction: Share Price Under Pressure
Investors responded negatively to the earnings release. Ola Electric’s shares fell as much as 7% in intraday trading, at one point slipping to around ₹28.73—a sharp drop reflecting concern over the weak top-line performance and slowing delivery volumes.
Even on days without heavy selling pressure, the stock has closed lower, underperforming broader market benchmarks. Key investor concerns include:
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Slowing demand for electric two-wheelers in India
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Service execution issues affecting customer satisfaction
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Competition eroding market share across segments
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Cash burn rates and the potential need for additional funding
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Macroeconomic headwinds affecting consumer discretionary spending
Over the past year, Ola’s share price has declined significantly, with much of the drop attributed to the gap between earlier growth expectations and current operational realities.
Company Strategy: Reset and Cost Discipline
Despite weak near-term results, Ola Electric’s management insists the quarter reflects a deliberate “structural reset” of the business. Chairman and founder Bhavish Aggarwal stated that the firm has shifted focus from chasing volume growth to strengthening operational fundamentals, improving service delivery, and controlling costs.
Key strategic initiatives include:
Retail footprint realignment:
Ola has rationalized its physical retail presence, closing underperforming locations and optimizing the store network for efficiency rather than maximum coverage.
Operating expense rationalization:
Company-wide cost reviews have targeted non-essential spending without compromising core R&D and manufacturing capabilities.
Vertical integration deepening:
Continued investment in battery innovation, component manufacturing, and supply chain control aims to reduce external dependencies and improve margin structure.
Service quality stabilization:
The “Hyperservice” program has been expanded to cut service backlogs and improve same-day turnaround for repairs and maintenance—addressing a long-standing customer pain point.
Lower breakeven point:
Revised volume economics suggest the company could reach breakeven sales at around 15,000 units per month if demand recovers, a significant improvement from previous thresholds.
Aggarwal also highlighted investments of more than ₹5,300 crore in R&D, manufacturing infrastructure, and battery innovation as laying the groundwork for future expansion when market conditions improve.
Looking Ahead: Challenges and Opportunities
Analysts say Ola’s prospects hinge on whether it can translate its improved unit economics and margin performance into sustainable revenue growth.
Near-term challenges:
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Weak consumer demand in the EV two-wheeler segment
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Intensifying competition from established automotive players
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Need for ongoing cost discipline without compromising growth
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Potential requirement for additional capital if losses persist
Long-term opportunities:
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India’s broader electric mobility theme remains strong, supported by government incentives
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Shift toward cleaner transport continues to gain policy and consumer momentum
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Ola’s industry-leading margins provide competitive advantage when volumes recover
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Investments in R&D and manufacturing create platform for future growth
Some brokerages have cut their target prices for the stock, warning that the turnaround could be slow and that Ola may need a cash infusion or strategic partnerships to bolster its competitive position. Others, however, point to the company’s large investments and improved operational efficiencies as reasons to remain optimistic about its long-term potential.
Conclusion: Progress Amid Pressure
The Ola Electric Q3 results present a company at a critical inflection point. On one hand, the 55% revenue plunge and 61% delivery collapse represent serious operational setbacks that cannot be minimized. On the other, the 34.3% gross margin demonstrates that when vehicles do sell, they sell profitably—a foundation that many competitors lack.
Bhavish Aggarwal’s “structural reset” narrative has credibility only if it translates into volume recovery in coming quarters. Margin improvement without top-line growth is economically unsustainable; fixed costs must be spread across production.
For now, investors are voting with their sell orders. The stock’s decline reflects skepticism that demand will rebound quickly enough to utilize the manufacturing capacity and cost structure Ola has built.
Revenue down. Margins up. Deliveries collapsed. Losses narrowed but remain substantial.
Ola Electric’s Q3 results offer hope for profitability—but only if customers start buying again.
