Ola Electric Mobility Ltd (NSE: OLAELEC) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Bhavish Agrawal — Chairman
Deepak Rastogi — Chief Financial Officer
Analysts:
Arvind Sharma
Presentation:
Operator
This meeting is being recorded. Ladies and gentlemen, good day and welcome to Ola Electric Q3FY26 earnings conference call. As a reminder, all participants will be on the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Before we begin, a few quick announcements for the attendees. Anything said on this call which reflects our outlook for the future or which could be construed as a forward looking statement may involve risks and uncertainties. Such statements or comments are not guarantees of our future performance and actual results may differ from those statements. To begin with, I would like to request Bhavish Agrawal, Chairman and Managing Director of Ola Electric to begin the conference. Good evening everybody. Friday evening, but thank you so much for joining us. Actually, I want to start by introducing our new CFO Deepak to everybody. Deepak Rastogi, he’s also on the call with me. And actually may I request everybody to switch off their videos. Those whoever have switched on. So welcome Deepak to the company. The news was made public about a couple of months back and maybe Deepak, I’ll request you to make some opening remarks and then we will open it up to Q and A. But looking forward to the interaction today.
Bhavish Agrawal — Chairman
Thank you Bhavish. Good evening everyone and thank you for joining us for this call. So let me start with Q3. You know, Q3 this quarter marks a structural reset for Ola Hydratek. As EV penetration growth slows down and we identified gaps in service execution. We made a deliberate choice to realign our retail footprint, cost structure and operating model to a sustainable steady state. We chose to fix the fundamentals rather than optimized for short term volume.
The result is a structurally lower breakeven business with significantly improved operating leverage. Now let me start with the key numbers for Q3. We delivered 470 crores of consolidated revenue. This is the highest ever gross margin. Consolidated gross margin we have achieved which is at 34.3%, which is 16% points higher and 3.4 year on year basis and 3.4 basis points higher on Q and Q. This also actually. We have also delivered 32,600 700 deliveries during this quarter and we have produced 72,500 cells. Can you please put your things on mute, please? Thank you. The performance reflects the strength of our vertically integrated model, Gen 3 platform, economics and disciplined execution. We continue to see gross margins stabilizing in the range of 35 to 40% during the year 25 financial year 2627. Over the last few years we have invested approximately 5300 crores across manufacturing, battery innovation and R and D. This has created full vertical integration across motors, batteries, cells, electronics and software along with scalable manufacturing infrastructure and a strong product roadback. 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. Actually Deepak, I want to highlight this point for everybody that the company has been in investment phase since pretty much the inception about four or five years ago. And we’ve created capacity and this is covered in our shareholders letter in detail, about a million units a year in the automotive side and by March, which is next month, about 6 GWh will be installed. So now after that our capex cycle finishes and there’ll be no new capex requirement till we grow into that. And that actually revenue potential is about 15,000 to 20,000 role. And on gross margins like you said, you know, for the last few quarters we’ve been guiding or you know, forecasting that we’ll get to the 35% range and which this quarter is more or less there. This also actually has been possible because of this vertically integrated business model of ours. Gross margin benefit step by step growth, CAPEX pay R& D pay investments. And we still see through FY27 this gross margin going between that 35 to 40% range. And just for context for everybody, this is much higher than even ICE industry where the gross margins are typically around high 20s or 30%. So this has been a meaningful advantage and even on our capital investment. So if you see in the shareholders letter we actually give you a comparison between us and others. There is no other Indian OEM who has invested this much into pure EV centric technologies and EV centric manufacturing. And this is a very important strength of ours. And the good news is that the capital cycle is now investment cycle is. Is now largely behind. Now onwards, like Deepak mentioned, we are focused on doubling down into growing into this and we will also cover, Deepak will cover and I will also give some commentary on the service challenges faced which we want to be very clear and acknowledge that and then how sales recovery we see happening.
Deepak Rastogi — Chief Financial Officer
Thank you so much Bhavish. So as Bhavish mentioned, you know, on services we acknowledge that execution gaps impacted brand test among prospective customers. However, this is a service scale issue and not a product quality issue. Independent Survey indicates over 90% product satisfaction and warranty provisions for the current financial year and that is expected. You know the warranty provisions for the current financial year are expected in a range of 2 to 3% which is among the lowest in the Indian EV industry. Through our Hyper Service initiative we have redesigned parts availability, expanded technician trainings, strengthen governance and deployed AI automation.
As a result, service backlogs have reduced nearly 50% from 14 days to around 7 to 8 days now currently and we are now completing 80% of service tickets on the same day. As service metrics stabilize, we expect our underlying strength to reassert itself. I think on this topic also Deepak, like you mentioned are, you know many times we get asked product, service and you know, firstly like Deepak said, we do have a service challenge which we are working through that has impacted brand trust and hence sales are down in the, in the last couple of quarters.
But the good news is that firstly we have improved our service operations meaningfully in the last three, four months or so. Deepak mentioned the numbers. But more importantly our engineering and product strength is very meaningfully real and much better than our competition. Most customers, when I meet them across stores and when I travel they say so your product is very good, we want to buy a product but please improve your service accessibility and service turnaround times. That’s what we’ve been focused on. And like Deepak mentioned, one of the things we’ve been telling the street is that the way to assess product quality between us and competition is to just look at the warranty costs. Now for our Gen1 platform because that was the first platform we had was higher than industry averages.
But now actually we are much better than our Indian OEM peers and actually in line with global benchmarks in terms of what kind of repeat rates or what kind of failure rates or warranty costs, we are having to take in our PNM and you know in the shareholders data you’ll see that at about 2 to 3%. So the headline here is yes, there’s a service challenge. We are fixing it. We’re fixing it and it’s meaningfully improving. We do have some journey to cover, and Brand Trust will take its time to recover.
Bhavish Agrawal — Chairman
But as a result of our cost improvements and structural operational model improvements, we’ve actually been able to create enough headroom and a lower break even point. So as we improve our service and as sales recover, we will see a faster roadmap to profitability.
Deepak Rastogi — Chief Financial Officer
Thank you, Bhavesh. So as we exit, you know, as we during this quarter we have executed a comprehensive operating model reset, consolidated quarterly OPEX including leases reduced to reduced from 840 crores at peak expansion to 484 crores during this, you know, in Q3. And we expect steady state between you know, 200, give or take 250 to 300 crores over the next couple of quarters
. At this level our EBITDA break even reduces to approximately 15,000 t per month which is 85%, you know, with 85% or 90% of Apex fixed cost, which means, you know, we would have to just put in some incremental fixed cost, you know, when we actually grow our business over time, which actually will drive a very, very strong margin through this.
Before that, Deepak, one more thing I want to just bring everybody’s to everybody’s notice is in the shareholders letter, page five. We have given a very clear roadmap for sales recovery and growth. And basically it’s three themes. First we have to fix our service and rebuild the brand trust with that which the company is in the middle of doing. Will take us another quarter or so to fully institutionalize service. And this time what we have done is really taken the foundational building approach to fixing the front end operational challenges that we faced.
And we are seeing good results in that in terms of service improvements as well as cost structure improvements. So the roadmap to recovery is fixing service, you know, that will actually let the product advantage shine. And I want to highlight a very interesting chart that we put in here for all of you on page six which is actually the, you know, I’m sure when you guys all also do your channel checks and all, you’ll see the customer, fundamentally a two wheeler customer wants range in his product and our products deliver the best range by far in the industry.
And you can see there a chart where our range to price index and this is real range, not certified range. Real range to price index is almost 50% higher than competition. So very meaningful benefit that our product has which the customer acknowledges. Our existing customers definitely acknowledge it. For the prospective customers who are holding back due to the brand noise around service, once that goes away, they will also start acknowledging it. Another important thing is we have the largest customer base in the industry. Given the fact that. You know, till date whatever number of two wheeler EVs have been sold, almost 30% are actually Ola vehicles. So 11 lakh customers use Ola and they actually have always referred us well and as service improves we’re very confident that they will start referencing OLA again. Another important point which Deepak mentioned is the structural cost reset that we have done. And you see that in page seven. You know about a year ago our cost OPEX cost was about 850 crores. And you know one of the feedback we took on the street was that because we were talking about segmented financials earlier, it confused the street. So this time what we’ve done is actually focused all our commentary on consolidated financials while we give segmented financials to the public for transparency. So all the numbers we talk about here are consolidated financials which means even with the gigafactory ramp, these costs are actually under control. And the second thing is since our business model in the front end is a fully company owned model, we’ve added lease expenses to our operational expenses in the commentary. So one year ago it was about 844 crores. And now with our cost actions in Q3 we are reporting 484. But we’ve taken a lot of cost actions in Q3 which is in a couple of quarters going to take us to about a 250300 crore level. In terms of opex, it’s a very meaningful improvement. Now this is a large change and like Deepak said, a large part of it is actually fixed in nature. So as we increase volumes back up to the 2030,000 levels, the cost will not increase linearly. In fact variable cost is only 10 15%. So what this does is actually in a period where the industry is penetration is growing slowly and where we’ve had our own service challenges, it actually lowers the threshold of breakeven and arrests the cash burn in the short term. But also as we improve our sales gives us very strong operating leverage as we come back in our volumes. Finally on the Gigafactory, Q3 marked the key milestone wherein we doubled the cell production to 2072,400 cells, achieved the first commercial deployment in house 4680 Mars cells and launched Ola Shakti. We are currently at 2.5 GWh installed capacity scaling to 6 GWh by March 26th. This positions us uniquely as the only Indian company to operationalize a scaled gigafactory and strengthen a long term cost and integration advantage. I’m just going to add a little bit, Deepak, on the gigafactory. So, gigafactory, we are the only Indian company. I want to underline that and write that in bold letters. Only Indian company to have operationalized the gigafactory. And actually outside of China, one of the very few companies which have operationalized the Gigafactory. And it actually highlights the company’s strong capabilities, talent and execution strength as far as manufacturing and R and D go. And the Gigafactory is ramping up. And this quarter was a highlight because we put ourselves into commercial production in this quarter. Before that it was all pilot production. This quarter Q3 was into commercial production. We gave our customers vehicles with the 4680 Bharat cell. And the feedback has been quite amazing. And like I mentioned in the past, the range benefit that customers want, our 4680 cell enhances that meaningfully. And you cannot deliver the range that people want without this level of a cell. And in addition, 4680 is not the end of it. In fact, it’s the start of it. We give on page nine a roadmap of our cell technology where we go from in the next 12 to 24 months. 4680 goes to 4600 goes to 4600. 120. Each next generation of cell actually gets us more energy density and more fast charging performance. And you know, this is a kind of a technology R and D loop that we’ve already proven with our automotive business where over three generations our gross margins went up from 10% to 35% now and our product quality improved meaningfully. Similarly on the cell, this will have a similar journey on gross margins as well as scale, manufacturing scale and hence competitive advantage. So this is something which we believe is going to be a very significant lever for strategic strength as well as optionality in revenue in the future. Because I’m sure everybody is following how globally the energy storage industry is also growing. And the gigafactory for us is going to obviously feed our own auto business, but also really get revenue and growth into this energy storage opportunity both in India and globally. That’s the future optionality. And the first product we launched there was Shakti. Shakti has gotten very good response. We are ramping it up in a step by step way as the gigafactory ramps up. But this really improves the kind of optionality. And I personally believe the energy storage business globally and even in India is going to be a much bigger business than automotive, although automotive is our current focus. And our focus is to stabilize that business by solving the service challenges and by getting back into sales growth. But the gigafactory from the foundation of this company was a very core part of our vision to both build strategic control and margins in automotive, but as well as really grow into the larger energy storage opportunity. To conclude, Q3 was about strengthening the. Foundation, restoring service execution, resetting cost, deepening vertical integration and advancing our sales strategy. The heavy built phase is behind us. With a structurally lower break even and embedded operating leverage, we are well positioned to enter the next phase of growth with significantly improved economics.
Questions and Answers:
Operator
Thank you so much and I look forward to for your questions now. Thank you Bhavish and thank you Deepak. We will now begin the question and answer session. Anyone who wishes to ask a question may use the raise hand option. If you wish to remove yourself from the question queue, you may press the raise hand option. Once again, participants are requested to unmute themselves before asking the question. Before asking the question, we request you to introduce yourself with your full name and your organization. Now we’ll wait for a moment while the question queue assembles. Thank you everyone. We’ll now take the first question from Mr. Arvind Sharma of City. Please unmute yourself and ask a question. Mr. Arvind Sharma, you may ask a question now.
Arvind Sharma
Yeah. Hi. Hi. Can you hear me? Yes. Hi. Hi everyone. Thank you for taking my question. The first one would be more on your aspirations for the sales. The production you said has been much higher. Has been, you know, around 32,600 deliveries. Sorry, not production, but deliveries. And 15,000 is a break even given the enablers on. The sales part by where do you think that Ola would be closer to this? Break even at least?
Bhavish Agrawal
Arvind, we will not be giving a time target of when we will get to either 15,000amonth or higher. But I want to say that see we are, you know we acknowledge the service challenges. We have to solve them. Brand trust will take some time to recover but the inherent strengths of the company in manufacturing, R and D and product are very well intact and they are so far ahead of competition that I don’t feel it’s so easy for anybody to catch up. So in that sense we don’t worry about short term market share. We are fixing the service challenges in a very structural institutional way. It will take some time but I do hope to give you guys some positive news.
Actually you don’t even need to wait for the quarter sales numbers you can track every week. I’m sure you guys do. So you will. We are seeing that goodness in regional sales metrics where we have solved service challenges more deeply. Like for example in the south etc, you know maybe in some markets in the north we see volumes have improved almost 2 to 3x in some markets, you know, wherever we have more meaningfully solved service challenges. So we expect that to play out across the country as over the next few months we more meaningfully solve some of these challenges.
Arvind Sharma
All right, thanks Bhavish.
The second question would be more on accounting thing. There was a fairly sharp increase in the employee cost this quarter. Even if one was to adjust for the one off expenses from 550 million going to almost 920 million. What do you attribute this to? Because last quarter you had said that it would structurally be going down given the optimization efforts that we were undertaken. It kind of nullifies the gross margin expansion at the EBITDA level.
Bhavish Agrawal
No, see the one off employee costs will be largely linked to the exits. Employee cost going up is largely linked to exits. We like I said we have done a lot of this cost actions in this quarter and those costs are front loading and the scale of those cost actions. Actually you will start seeing in the OPEX benefit in the coming quarter. Deepak, you want to add to that?
Deepak Rastogi
No, I, 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 let me, you know we can you know take this question offline and then you know, which is all if there are any which are basically you know there because if anything it will be linked to this one time thing. But I also don’t think I don’t see the data like that.
Arvind Sharma
Sure. Yes. One final question. Just, just, you know, a statement that you made that Ola is past the big capex part on the cell part. You are still expanding beyond 6 gigawatt hours, right?
Bhavish Agrawal
It the the one goal that you told about last time that still remains so Irvin the we have a PLI allocation of 20 gigawatt hours. Our phase one in that was 5 gigawatt hours which will be done with this. Now, as you know, we are the only guy in the PLI scheme who has done anything. The other guys have not done anything.
So we are in talks with the government to either elongate the timelines of the PLI or if we need to do anything, we will think of capital in that case separately. But hence for our business priorities, we don’t. {Abrupt End}