Ola Electric Mobility Ltd’s shares fell to an all-time low of ₹27.36 on Tuesday after its December-quarter (Q3FY26) results underlined deeper operational strains—particularly around service quality and a high fixed-cost base.
₹487 crore”>Ola reported a Q3 net loss of ₹487 crore, exceeding its revenue of ₹470 crore, which declined 55% year-on-year. Adjusted EBITDA margin (including lease expenses) deteriorated to -69%, compared with -47% in Q3FY25.
The culprit? The sharp 61% drop in sales volumes to 32,680 units. Thus, causing market share loss.
Service setback
Management acknowledged that service issues significantly damaged brand trust, prompting potential customers to hold back purchases. The company also deliberately slowed sales in the short term to overhaul its service network, retail footprint and operating model.
The impact of lower volumes was severe because 85–90% of Ola’s costs are fixed. Even though gross margins improved—helped by the Gen3 platform and benefits from vertical integration—the fixed-cost structure amplified losses.
The company is now focused on rebuilding service credibility. Spare parts availability has improved, more technicians are being hired and trained, and AI tools are being deployed to accelerate fault detection and repairs. Service backlog has reduced from around 14 days to 7–8 days, with about 80% of service tickets now closed the same day.
cost reset
Ola is also cutting costs. Consolidated quarterly operating expenses, including leases, have fallen from a peak of ₹840 crore to ₹484 crores. The company expects steady-state quarterly operating expenses of ₹250–300 crore over the next couple of quarters.
With this leaner structure, management estimates EBITDA break-even at around 15,000 vehicles per month. Given the largely fixed cost base, even a modest recovery in volumes could meaningfully improve margins.
The company is further strengthening vertical integration, with about 6 GWh of cell manufacturing capacity expected by March. Over time, this should help lower battery costs and improve unit economics.
All said, Ola remains a high-risk bet for long-term investors, with execution now critical. According to calculations by Emkay Research, Ola has turned net debt of ₹670 crore as of 9MFY26, compared with net cash of ₹160 crore in H1FY26.
While management’s steps on service quality and cost rationalization appear directionally correct, investor confidence may hinge on clear evidence of sustained volume recovery and a sharp reduction in losses. Until then, caution is warranted.
