Ola Electric's revenue falls 39% as volumes disappoint

Ola Electric Mobility Limited (NSE: OLAELEC) reported Q2 FY27 revenue of ₹421 crore, down 39% year on year. Its consolidated net loss narrowed to ₹362 crore from ₹418 crore, but adjusted EBITDA margin deteriorated to -58.5%. What happened The company delivered approximately 35,000-36,000 vehicles during the September quarter, below the roughly 44,000 units expected by analysts. Gross margin declined to 29.93% from 30.9% a year earlier. Management expects some further gross-margin pressure in Q3 and Q4 due to its dealer-network transition, while targeting a meaningful improvement in operating margins. Ola Electric is targeting 700 dealer-led outlets by Q4 FY27 and monthly production of 25,000 vehicles by December 2026. Why it matters The narrowing net loss looks encouraging at first glance, but the revenue decline and negative adjusted EBITDA margin point to a business still struggling to achieve operating scale. The transition from company-owned stores to dealer-led outlets could reduce fixed costs over time. However, it also creates execution risks around distribution, customer experience and sales volumes. The company's manufacturing and battery-cell ambitions offer potential long-term opportunities, but near-term demand and market-share trends remain the more important variables. What to watch next Monitor monthly registrations, dealer-network expansion and operating-margin improvement. December 2026 is an important milestone for the company's 25,000-unit monthly production target. Actual deliveries, rather than production capacity alone, will determine whether the recovery is gaining traction. Stance: Cautious. Loss reduction is positive, but falling revenue and weak volumes remain significant concerns. A sustained recovery in deliveries and operating margins is needed before the earnings outlook improves.