Ola Electric Q4 FY26: Loss narrows; stock slides 6%

What moved the stock on Thursday

Ola Electric Mobility Ltd slipped nearly 6% in Thursday’s trade, giving up gains from the previous two sessions. The fall came even as the company reported a narrower loss for the March quarter. Investors focused on management commentary that gross margins could moderate in Q1 and Q2 due to commodity inflation and pricing actions aimed at accelerating growth.

The stock fell 5.71% to an intraday low of Rs 34.83. Broker notes after the update largely kept a cautious stance, with several houses maintaining Sell ratings while adjusting target prices. The combination of weaker year-on-year revenue and concerns around near-term margin pressure kept sentiment restrained.

Q4 FY26 headline numbers: loss narrows, revenue drops

For the March quarter, Ola Electric reported a net loss of Rs 500 crore, compared with Rs 870 crore in the year-ago quarter. While the loss narrowed, consolidated revenue declined nearly 57% to Rs 265 crore from Rs 611 crore in the corresponding quarter last year.

Management framed the quarter as a low-volume period, but highlighted improvements in cash flow, margins, and cost discipline. The company also reiterated its operating priorities: recovering volumes, holding gross margins, keeping operating expenses disciplined, ramping the Gigafactory, and translating the existing gross block into operating leverage.

Cash flow turned positive in the quarter

Ola Electric told shareholders that March was a low-volume quarter but also its first operating cash-flow positive quarter. Consolidated cash flow from operations (CFO) stood at Rs 91 crore, supported by PLI inflows, stronger gross margins, lower opex, and tighter working-capital discipline.

Consolidated free cash flow (FCF) improved to minus Rs 131 crore. Segment disclosure indicated Auto delivered Rs 213 crore CFO and Rs 173 crore FCF in Q4. The Cell business remained in “planned investment mode” as the company ramps the Gigafactory and prepares the next phase of cell and storage products.

Gross margin jumped to 38.5% in Q4 FY26

The company said consolidated gross margin reached 38.5% in Q4 FY26, rising from 34.3% in Q3 and 13.7% in Q4 FY25. Ola Electric described this as an industry-leading gross margin profile, ahead of most two-wheeler OEMs, including ICE incumbents.

At the same time, management flagged that margins may moderate in Q1 and Q2 due to commodity inflation and pricing actions. It said it has a margin buffer to stay aggressive on price and customer value while maintaining unit economics.

FY26 described as a “cost reset” year

Ola Electric said consolidated operating expenses, including lease rentals, reduced to Rs 428 crore in Q4 FY26 from Rs 844 crore in Q4 FY25. The company attributed this to network rationalisation, tighter sales and service costs, lower fixed overheads, and stronger operating governance.

It expects opex to reduce further towards Rs 350 crore per quarter over the next couple of quarters as the benefits of FY26 actions flow through. The company linked this cost reset to a lower breakeven point as volumes recover.

Capacity, Gigafactory scale-up, and utilisation focus

Ola said the core auto capex is already in place for up to 1 million vehicles of annual capacity. It also said the Gigafactory Phase 1 infrastructure is in place for the 6 GWh scale-up.

Management stated that the gross block across auto and cell can support about Rs 15,000-20,000 crore of revenue scale without needing incremental capex. It added that the next phase is about utilisation, and that with the reset opex base and current gross margin structure, breakeven volumes are lower than before.

The company said adjusted operating EBITDA breakeven is achievable at 20,000-25,000 units per month at around Rs 300-350 crore of quarterly opex, subject to pricing, mix, and commodity conditions.

Key reported metrics at a glance

Broker targets stayed cautious despite updates

After the results and commentary, a couple of brokerages raised target prices but retained Sell ratings, citing the sharp revenue decline. Ambit Capital retained a Sell rating with a target of Rs 24, while Emkay Global pegged fair value at Rs 25. Citi’s target was cited at Rs 26, and HSBC cut its target to Rs 33.

The targets suggested up to 31% downside from the day’s low level cited in the report. Separately, Goldman Sachs downgraded Ola Electric to Neutral and cut its target price to Rs 26 from Rs 52, also lowering FY26 to FY28 revenue estimates and factoring a mid-single-digit market share for FY30E and beyond, versus earlier low-teens expectations.

Market share data and competitive pressure in the backdrop

Market share was another point of concern in broker commentary. As per the Vahan website data cited, Ola Electric’s market share in the electric two-wheeler segment fell to 6.3% in January from about 26% a year ago.

Separately reported commentary linked the pressure to service-related challenges, intense competition, and adverse customer perception. Citi also pointed to a slower-than-expected pace of electrification in India’s two-wheeler segment, with GST cuts further slowing electrification, as cited in the report.

The longer slide in the stock price

The company has seen a sharp correction from its record peak of Rs 157, an 84% fall as cited. The stock had debuted at an issue price of Rs 76 in 2024 and later surged in a post-listing frenzy. The decline has reportedly wiped out nearly Rs 57,000 crore in investor wealth, and the stock was described as trading below Rs 30 in less than two years since listing.

Technical levels highlighted by analysts

Technical commentary cited immediate support around Rs 24 and resistance at Rs 27, with an expected trading range of Rs 24 to Rs 29. A decisive and sustained move above Rs 27 was described as a trigger for further gains towards Rs 29 in the short term. The earlier support zone of Rs 28 to Rs 30 was also described as having turned into a strong resistance band.

The same note flagged that unless the stock stabilises above Rs 28 to Rs 30, the path of least resistance remains lower, with the next potential downside zone cited around Rs 20 to Rs 22.

What the company is building alongside scooters

The broader shareholder communication referenced product and technology initiatives, including new Gen 3 scooters and a transition towards in-house battery production with the introduction of 4680 cells. It also referred to strategic initiatives to manage risks related to rare earth materials and to strengthen technology leadership.

In another update referenced in the combined material, the company also highlighted new energy products, including “Ola शक्ति”, described as a residential battery energy storage system.

What to watch next

Near-term attention is likely to stay on volume recovery, the sustainability of the elevated gross margin profile, and whether opex tracks towards the stated Rs 350 crore per quarter level. Investors will also watch how pricing actions and commodity inflation influence Q1 and Q2 gross margins, given management’s guidance that margins may moderate.

Any further brokerage revisions are likely to hinge on evidence of stabilising market share, service execution, and progress on Gigafactory ramp-up and utilisation. The company’s own framework remains centred on turning the existing asset base and lower cost structure into operating leverage as volumes normalise.