Ola Electric Mobility Ltd fell nearly 6 per cent in Thursday's trade, erasing gains made in the previous two sessions, even as the electric vehicle maker reported a narrowing of losses for the March quarter to Rs 500 crore from Rs 870 crore in the year-ago quarter. The stock fell, as the company believes gross margins may moderate in Q1 and Q2 due to commodity inflation and pricing actions to accelerate growth, but said it has margin buffer to stay aggressive on price and customer value while maintaining strong unit economics.

Ola Electric said its financial priorities are clear: recover volumes, hold strong gross margins, keep opex disciplined, ramp the Gigafactory, and convert the gross block already created into operating leverage.

Following this, a couple of brokerages raised target prices for the stock but retained their 'Sell' ratings, as consolidated revenue for the Bhavish Aggarwal-led company declined nearly 57 per cent to Rs 265 crore from Rs 611 crore in the corresponding quarter last year.

Ola Electric shares fall; target prices
Ola Electric shares fell 5.71 per cent to hit a low of Rs 34.83 apiece. Ambit Capital retained 'Sell' and a target of Rs 24 on the stock. Emkay Global finds the stock worth Rs 25. Citi sees Ola Electric at Rs 26 while HSBC has cut its target to Rs 33 on the stock. The targets suggested up to 31 per cent downside from today's low level. 

What Ola Electric told shareholders 
Ola Electric said March was a low volume quarter, but also the first operating cash-flow positive quarter. Consolidated cash flow from operations (CFO) at Rs 91 crore was 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. Auto delivered Rs 213 crore CFO and Rs 173 crore FCF in Q4. Cell remained in planned investment mode as we ramp the Gigafactory and prepare the next phase of cell and storage products." it said.

Ola Electric said consolidated gross margin reached 38.5 per cent in Q4 FY26, up from 34.3 per cent in Q3 and 13.7 per cent in Q4FY25, noting that it is now an industry-leading gross margin profile, meaningfully ahead of most two-wheeler OEMs, including ICE incumbents. 

Ola says Opex will fall further
Calling FY26 a year of cost reset, Ola Electric said consolidated operating expenses, including lease rentals, reduced from Rs 844 crore in Q4FY25 to Rs 428 crore in Q4FY26. This came from network rationalisation, tighter sales and service costs, lower fixed overheads and stronger operating governance.

"We expect opex to reduce further towards Rs 350 crore per quarter over the next couple of quarters as the full benefit of FY26 actions flows through. This gives us a much better cost structure as volumes recover," it said.

Ola said the core auto capex is already in place for up to 1 million vehicles of annual capacity. The Gigafactory Phase 1 infrastructure is in place for the 6 GWh scale-up, Ola said. Together, this gross block can support about Rs 15,000–20,000 crore of revenue scale across auto and cell without a need in incremental capex. 

"The next phase is about utilisation. With the reset opex base and current gross margin structure, the business has a much lower breakeven volume. At around Rs 300-350 crore of quarterly opex, adjusted operating EBITDA breakeven is achievable at 20,000-25,000 units per month, subject to pricing, mix and commodity conditions," Ola said.