Ola Electric Sees Rebound in Operations Following Strategic Reset: Chairman's Assessment

Ola Electric Sees Rebound After Restructuring Efforts

Bhavish Aggarwal, founder and chairman of Ola Electric, announced during the company's earnings call on May 20 that the electric-vehicle maker is experiencing a rebound after months of restructuring and operational corrections. The company is working to recover from service issues, lower deliveries, and supply-chain disruptions.

Ola Electric spent much of the previous quarter reducing costs, fixing service operations, and improving customer experience. The company's focus on operations during the quarter led to improvements in both cost and customer experience. Revenue from operations fell 56.6 percent year-on-year to Rs 265 crore in the March quarter, and sequentially, revenue was 43.6 percent lower. Total income dropped 58.2 percent to Rs 304 crore from Rs 728 crore in the year-ago quarter.

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Registrations improved sequentially, with March registrations at around 10,000 units, April at 12,000, and May trending towards 14,000-15,000. Order growth was ahead of registrations due to supply constraints and production backlog. Aggarwal stated that the company started scaling up volumes again from mid-March after focusing on operational fixes.

Ola Electric reported consolidated gross margins improved to 30.6 percent for FY26, while Q4 gross margins stood at 38.7 percent. Excluding production-linked incentives, Q4 gross margins came in at 33.5 percent. The improvement reflected the company's vertically integrated manufacturing strategy, including its supply chain and battery operations.

The company also reduced consolidated operating expenses, including lease expenses, to Rs 428 crore in Q4 from Rs 844 crore last year. Ola Electric expects operating expenses to further decline to Rs 350 crore over the next few quarters. Aggarwal stated that the company's operating leverage remained high as more than 90 percent of its operating expenses were fixed.

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Ola Electric has faced service and spare-part related challenges over the last year, but has since changed its inventory and procurement systems by stocking parts directly at service centers and improving forecasting systems. The company added that service backlog declined 88 percent during the year, while same-day closures improved to around 87 percent. Warranty costs also fell to Rs 59 crore in FY26 from over Rs 500 crore in the previous year.

Demand for Ola Electric's products is now increasing, resulting in lower inventory levels and production backlogs. The company expects Q1 FY27 orders to reach 40,000-45,000 units and projected consolidated revenue of Rs 500-550 crore. Ola Electric's motorcycle business is gaining traction, with bikes contributing 15 percent of April gross orders and the company holding over 50 percent share in electric motorcycles.