Thank you so much for joining us. Actually, I want to start by introducing our new CFO, Deepak, to everybody, Deepak Rastogi.

He is also on the call with me. Actually, may I request everybody to switch off their videos, whoever has switched on?

Welcome, Deepak, to the company. The news was made public about a couple of months back.

Maybe Deepak, I'll request you to make some opening remarks, and then we will open it up to Q&A. Looking forward to the interaction today.

Thank you, Bhavish. Good evening, everyone, and thank you for joining us for this call.

Let me start with Q3. Q3, this quarter marks a structural reset for Ola Electric.

As EV penetration growth slows down and we identified gaps in service execution, we made a deliberate choice to realign our retail footprint, cost structure, and operating model to a sustainable steady state. We chose to fix the fundamentals rather than optimize for short-term volume.

The result is a structurally lower break-even business with significantly improved operating leverage. Now, let me start with the key numbers.

For Q3, we delivered ₹470 crores of consolidated revenue. This is the highest-ever gross margin, consolidated gross margin, we have achieved, which is at 34.3%, which is 16%--you know, points higher, and 3.4 year-on-year basis, and 3.4 basis points higher on Q-on-Q.

This also actually--we have also delivered 32,600 700 deliveries during this quarter, and we have produced 72,500 cells. Can you please put your things on mute, please?

Thank you. The performance reflects the strength on of our vertically integrated model, Gen 3 platform economics, and disciplined execution.

We continue to see gross margins stabilizing in the range of 35% to 40% during the year 25--FY 26-27. Over the last few years, we have invested approximately ₹5,300 crores across manufacturing, battery innovation, and R&D.

This has created full vertical integration across motors, batteries, cells, electronics, and software, along with scalable manufacturing infrastructure and a strong product roadmap. The heavy capex phase, which we have been investing so far is behind us now.

Our current footprint supports 1 million vehicles and 6 gigawatt-hour of cell capacity, and the focus now shifts to scaling into this capacity.

Actually Deepak, I want to highlight this point for everybody that the company has been in investment phase since pretty much the inception, about 4, 5 years ago, and we've created a capacity, and this is covered in our shareholders' letter in detail, about a million units a year in the automotive side, and by March, which is next month, about 6 gigawatt-hour will be installed. Now, after that, our capex cycle finishes and there'll be no new capex requirement until we grow into that.

That actually revenue potential is about ₹15,000 to ₹20,000 crore. On gross margins, like you said, for the last few quarters we've been guiding or forecasting that we'll get to the 35% range, and which this quarter is more or less there.

This also actually has been possible because of this vertically integrated business model of ours. Jo aaj gross margin ka hum benefit dekh rahe hain, wo pichhle 2-3 saalon se jo hum step-by-step capex pe, R&D pe investments kar rahe hain, uske kaaran hai.

We still see through FY 27 this gross margin going between that 35% to 40% range. Just for context for everybody, this is much higher than even ICE industry, where the gross margins are typically around high-20s or 30%.

This has been a meaningful advantage, and even on our capital investments, if you see in the shareholders' letter, we actually give you a comparison between us and others. There is no other Indian OEM who has invested this much into pure EV-centric technologies and EV-centric manufacturing.

This is a very important strength of ours, and the good news is that the investment cycle is now largely behind. Now onwards, like Deepak mentioned, we are focused on doubling down into growing into this.

Deepak will cover and I will also give some commentary on the service challenges faced, which we want to be very clear and acknowledge that, and then how sales recovery we see happening. Yeah.

Thank you so much, Bhavish. As Bhavish mentioned, on services, we acknowledge that execution gaps impacted brand trust among prospective customers.

However, this is a service scale issue and not a product quality issue. Independent survey indicates over 90% product satisfaction, and warranty provisions for the current financial year and that is expected, the warranty provisions for the current financial year are expected in the range of 2% to 3%, which is among the lowest in the Indian EV industry.

Through our HyperService initiative, we have redesigned parts availability, expanded technician trainings, strengthened governance, and deployed AI automation. As a result, service backlogs have reduced nearly 50% from 14 days to around 7 to 8 days now currently, and we are now completing 80% of service tickets on the same day.

As service metrics stabilize, we expect our underlying strength to reassert itself.

I think on this topic also, Deepak, like you mentioned, many times we get asked, "Kya aapke product mein issue hai, kya aapka service mein issue hai?" Firstly, like Deepak said, we do have a service challenge which we are working through that has impacted brand trust, and hence sales are down in the last couple of quarters.

The good news is that firstly, we have improved our service operations meaningfully in the last 3, 4 months or so. Deepak mentioned the numbers.

More importantly, our engineering and product strength is very meaningfully real and much better than our competition. Most customers, when I meet them across stores and when I travel, they say, "Sir, your product is very good.

We want to buy a product. Please improve your service accessibility and service turnaround times."

That's what we've been focused on. Like Deepak mentioned, one of the things we've been telling the street is that the way to assess product quality between us and competition is to just look at warranty costs.

Now, for our Gen 1 platform, because that was the first platform we had, was higher than industry averages. Now actually, we are much better than our Indian OEM peers and actually in line with global benchmarks in terms of what kind of repeat rates or what kind of failure rates or warranty costs we are having to take in our P&L.

In the shareholders' letter you'll see that at about 2% to 3%. The headline here is: yes, there's a service challenge; we are fixing it, and it's meaningfully improving.

We do have some journey to cover, and brand trust will take its time to recover. As a result of our cost improvements and structural operational model improvements, we've actually been able to create enough headroom and a lower break-even point.

As we improve our service and our sales recover, we will see a faster road map to profitability.

Thank you, Bhavish. During this quarter we have executed a comprehensive operating model reset.

Consolidated quarterly opex, including leases, reduced from ₹840 crores at peak expansion to ₹484 crores in Q3, and we expect steady state between 200 give or take ₹250 to ₹300 crores over the next couple of quarters. At this level, our EBITDA break-even reduces to approximately 15,000 units per month, which is 85%, with 85% or 90% of opex fixed cost, which means we would have to just put in some incremental fixed cost when we actually grow our business over time, which actually will drive very, very strong margins through this.

Before that, Deepak, one more thing I want to just bring to everybody's notice is in the shareholders' letter, page 5, we have given a very clear roadmap for sales recovery and growth, and basically it's three themes. First, we have to fix our service and rebuild the brand trust with that, which the company is in the middle of doing.

It will take us another quarter or so to fully institutionalize service. This time what we have done is really taken the foundational building approach to fixing the front-end operational challenges that we faced, and we are seeing good results in that in terms of service improvements as well as cost structure improvements.

The roadmap to recovery is fixing service. That'll actually let the product advantage shine.

I want to highlight a very interesting chart that we've put in here for all of you on page 6, which is actually I'm sure when you guys all also do your channel checks and all, you'll see a two-wheeler customer wants range in his product, and our products deliver the best range by far in the industry. You can see there a chart where our range to price index--and this is real range, not certified range--our real range to price index is almost 50% higher than competition.

A very meaningful benefit that our product has which the customer acknowledges, our existing customers definitely acknowledge it. For the prospective customers who are holding back due to the brand noise around service, once that goes away, they will also start acknowledging it.

Another important thing is we have the largest customer base in the industry given the fact that, till date, whatever number of two-wheeler EVs have been sold, almost 30% are actually Ola vehicles. So, 11 lakh customers use Ola and they're actually have always referred us well, and as service improves, we're very confident that they will start referencing Ola again.

Another important point which Deepak mentioned is the structural cost reset that we have done. You see that on page 7.

About a year ago, our opex cost was about ₹850 crores, and one of the feedback we took on the street was that, because we were talking about segmented financials earlier, it confused the street. This time, what we've done is actually focused all our commentary on consolidated financials, while we give segmented financials to the public for transparency.

All the numbers we talk about here are consolidated financials, which means even with the Gigafactory ramp, these costs are actually under control. The second thing is since our business model in the front end is a fully company-owned model, we've added lease expenses to our operational expenses in the commentary.

One year ago it was about ₹840 crores, and now with our cost actions, in Q3 we're reporting 484, but we've taken a lot of cost actions in Q3, which is in a couple of quarters going to take us to about a ₹250, ₹300 crore level in terms of opex. Very meaningful improvement.

Now this is a large change, and like Deepak said, a large part of it is actually fixed in nature. As we increase volumes back up to the 20,000, 30,000 levels, the cost will not increase linearly.

In fact, variable cost is only 10% to 15%. What this does is actually in a period where the industry penetration is growing slowly and where we've had our own service challenges, it actually lowers the threshold of break-even and arrests the cash burn in the short term, but also as we improve our sales gives us very strong operating leverage as we come back in our volumes.

Finally, on the Gigafactory, Q3 marked a key milestone wherein we doubled the cell production to 20 72,400 cells, achieved the first commercial deployment in-house 4680 Bharat cells, and launched Ola Shakti. We are currently at 2.5 gigawatt-hour installed capacity, scaling to 6 gigawatt-hour by March '26.

This positions us uniquely as the only Indian company to operationalize a scaled Gigafactory and strengthen a long-term cost and integration advantage.

I'm just going to add a little bit, Deepak, on the Gigafactory. The Gigafactory, we're the only Indian company--I want to underline that and write that in bold letters--only Indian company to have operationalized the Gigafactory, and actually outside of China, one of the very few companies which have operationalized the Gigafactory.

It actually highlights the company's strong capabilities, talent, and execution strength as far as manufacturing and R&D go. The Gigafactory is ramping up, and this quarter was a highlight because we put our cells into commercial production in this quarter.

Before that, it was all pilot production. This quarter, Q3, was into commercial production.

We gave our customers vehicles with the 4680 Bharat cell, and the feedback has been quite amazing. Like I mentioned in the past, the range benefit that customers want, our 4680 cell enhances that meaningfully.

You cannot deliver the range that people want without this level of a cell. In addition, 4680 is not the end of it, in fact it's the start of it.

We give on page 9 a roadmap of our cell technology where we go from in the next 12 to 24 months, 4680 goes to 4600, goes to 46120. Each next generation of cell actually gets us more energy density and more fast-charging performance.

This is a kind of a technology R&D loop that we've already proven with our automotive business where over three generations our gross margins went up from 10% to 35% now and our product quality improved meaningfully. Similarly, on the cell, this will have a similar journey on gross margins as well as manufacturing scale, and hence competitive advantage.

This is something which we believe is going to be a very significant lever for strategic strength as well as optionality in revenue in the future. Because I'm sure everybody's following how globally the energy storage industry is also growing, and the Gigafactory for us is going to obviously feed our own auto business, but also really get revenue and growth into this energy storage opportunity both in India and globally.

That's the future optionality, and the first product we launched there was Shakti. Shakti has gotten very good response.

We are ramping it up in a step-by-step way as the Gigafactory ramps up. This really improves the kind of optionality, and I personally believe the energy storage business globally and even in India is going to be a much bigger business than automotive, although automotive is our current focus and our focus is to stabilize that business by solving the service challenges and by getting back into sales growth.

The Gigafactory, from the foundation of this company was a very core part of our vision to both build strategic control and margins in automotive, but as well as really grow into the larger energy storage opportunity.

To conclude, Q3 was about strengthening the foundation, restoring service execution, resetting cost, deepening vertical integration, and advancing our cell strategy. The heavy build phase is behind us with a structurally lower break-even and embedded operating leverage.

We are well-positioned to enter the next phase of growth with significantly improved economics. Thank you so much, and I look forward for your questions now.

Thank you, everyone. We'll now take the first question from Mr.

Arvind Sharma of Citi. Please unmute yourself and ask your question.

Mr. Arvind Sharma, you may ask your question now.

Hi. Can you hear me?

Yes, Arvind.

Great. Hi, everyone.

Thank you for taking my question. The first one would be more on your aspirations for the sales.

The production, you said, has been at around 32,600 deliveries, and 15,000 is the break-even. Given the endeavors on the sales part, by when do you think that Ola would be closer to this break-even at least?

Arvind, we will not be giving a time target of when we will get to either 15,000 a month or higher. I want to say that, see we acknowledge the service challenges.

We have to solve them. Brand trust will take some time to recover.

The inherent strengths of the company in manufacturing, R&D, and product are very well intact. They are so far ahead of competition that I don't feel it's so easy for anybody to catch up.

In that sense, we don't worry about short-term market share. We're fixing the service challenges in a very structural, institutional way.

It will take some time, but I do hope to give you guys some positive news. Actually, you don't even need to wait for the quarter.

Ye to sales numbers hamare Vahan pe you can track every week, I'm sure you guys do. We're seeing that goodness in regional sales metrics where we have solved service challenges more deeply, like for example in the South, etc., maybe in some markets in the North.

We see volumes have improved almost 2 to 3x in some markets wherever we have more meaningfully solved service challenges. We expect that to play out across the country as over the next few months we more meaningfully solve some of these challenges.

All right. Thanks, Bhavish.

The second question would be more on the accounting thing. There was a fairly sharp increase in the employee cost this quarter, even if one was to adjust for the one-off expenses.

From ₹550 million going to almost ₹920 million, what do you attribute this to? Because last quarter you had said that it would structurally be going down given the optimization efforts that you are undertaking.

It kind of nullifies the gross margin expansion at the EBITDA level.

No, see the one-off employee costs will be largely linked to the exits. Actually, the employee costs going up is largely linked to exits, Arvind.

We, like I said, we have done a lot of this cost actions in this quarter, and those costs are front-loaded. The scale of those cost actions actually you'll start seeing in the opex benefit in the coming quarter.

Deepak, you want to add to that?

No, I think, Arvind, I will take this question offline because we do not see the way you are looking at the data right now. We can take this question offline and then we can resolve if there are any which are basically there.

If anything, it'll be linked to this one-time thing. I also don't see the data like that.

Yeah.

Sure, sir. Here's one final question.

Just a statement that you made that Ola is past the big capex part. On the cell part, you are still expanding beyond 6 gigawatt-hour, right?

The one goal that you told about last time, that still remains.

See, Arvind, we have a PLI allocation of 20 gigawatt-hour. Phase

1

in that was 5 gigawatt-hour, which will be done with this. Now, as we are the only guy in the PLI scheme who has done anything.

The other guys have not done anything. We are in talks with the government to either elongate the timelines of the PLI or if we need to do anything, we will think of capital in that case separately.

Hence, for our business priorities, we don't expect any more Gigafactory expansion as far as the current roadmap goes.

This would be enough to cater to both the automotive as well as the BESS needs?

Yeah. Just as a rule of thumb, Arvind, 6 gigawatt-hour installed capacity means, let's say practically you can get 5 out of it with the yields, etc.

So,

5

gigawatt-hour, if each product takes 3.5 to 4 kilowatt-hour, that's about a million, 1.2 million products. Between our Shakti business and our auto business, that's the headroom we have in our own Gigafactory.

Got sir. Thank you so much for taking my questions.

That was all from my side. Thanks.

Thank you. We'll take the next question from Mr.

Ishan Bhargava of Bank of America. You may unmute yourself and please ask your question.

Yeah. Thank you for taking my question.

The first one is more fundamental in nature. The EV industry has plateaued around 6% to 7% adoption for a while now.

As you've addressed in your shareholder letter as well, the industry is entering a more mature phase now. What, in your opinion, would trigger this next leg of growth ahead?

Ishan, see firstly, like any technology adoption industry, and EV is a technology adoption industry, there is actually this notion very well-established in the Valley called Crossing the Chasm in terms of market adoption. I'm sure some of you analysts would have read the book there.

Basically, what happens is the early adopters adopt, and then the followers need more education and more stability in terms of product experiences to adopt. It's exactly what has happened in the EV industry.

We have been focused on penetration. The incumbent players don't really focus on penetration, they focus on just having a product just to play in the industry.

As we have in the last few quarters focused on our own operational focus of service, we've not communicated in a very meaningful way the benefits of EV to the customer. The reality is the benefits of EV are very strong: opex savings, 90% lower cost of operations.

For the two-wheeler customer, that matters in a meaningful way. This next level of a customer, which is a follower customer, needs more education and marketing of that.

You'll see us do some meaningful steps in that direction very soon.

Got that. Thanks for that.

Secondly, last quarter we had guided for opex stabilizing to around ₹350 crores by Q1 FY 27, while now our target is more aggressive at around ₹250 to ₹300 crores in the same time horizon. Presuming that the structural drivers that are highlighted in the letter have been in place for a while,

but

our opex has been range-bound over the last three quarters between ₹470 to ₹500 crores. What particular measures provide us the confidence that we can attain this revised and more aggressive, reduced opex within the next two quarters?

See, Ishan, the actions that we've taken is written there, I'll not go over that again. A lot of those actions have been taken towards the end of Q2 and Q3.

In that direction, these two quarters have some of these one-off costs, you don't see the clean cost structure yet. You'll start seeing it in Q4 and you'll see more of it in Q1.

What we've also done is in this last quarter and including in the last month in January and February, we've really gone deep into some structural changes across the board so that our operating leverage potential improves. You'll see that all thing play out.

I don't want to jump the gun here and give you too many micro details or give you any very sharp numbers for the coming quarter. I also want to highlight, Ishan, I think the last one you were referencing was only auto segment, right?

Whereas now what we're saying is actually consolidated. We've been able to now scale our Gigafactory with much lower cost.

We've been able to optimize the productivity in the field of our service technicians. We've been able to optimize some of corporate costs.

We've used a lot of AI in our back-office processes to really optimize the cost structure there. All of these things have actually converged at this time because, like I said in the beginning, we've used this operational challenges as an opportunity to really optimize the business model and position it right for the next phase of growth so that we hit profitability faster and the cash generation happens after that.

Deepak, you want to add anything to that?

No, I just wanted to just say that we are very confident of achieving these numbers. That's all I can tell you beyond what...

If I can add, we've already done all the actions.

Abhi

to bas Deepak aapko number account karne hain. Yes.

Ishan, we are on course to deliver this.

Got that. Those were my questions.

Thanks for taking.

Thank you, Ishan. We'll take the next question from Mr.

Arun Kejriwal of TPG. Sir, you may unmute yourself and ask question.

Thanks, Bhavish. During our last interaction, you had informed how the company would lower its break-even point through a calibrated mix of cost rationalization, improved operational efficiencies, and resource optimization.

With Ola now positioned as a lean and agile manufacturing hub for E2Ws and cells, how do you plan to leverage these structural efficiencies to further strengthen financial performance, enhance margins, and drive long-term shareholder value creation?

Sir, Arun sir, good question. I think the fundamental answer is what's covered in the letter that because we are a vertically integrated operations both on the back end and the front end, and our back end, which is the manufacturing and R&D and supply chain, is so efficient because for the last 4, 5 years we've been hammering away at it and we have three generations of our platform, we have two factories built out.

The benefit of that vertical integration is already seen in our gross margins and even in our opex, which is not as transparent to the street, but our operating costs. Basically the cost to manufacture per unit of our vehicle or, let's say, Shakti product is actually fairly low.

Maybe in the future we will talk more about that. Same we are doing on the front end now, because it's all company-owned.

The efficiencies we can drive on repair per technician, sales per executive, sales per square feet, sales per store is fairly high. Now, in the last 1 year we had expanded our stores to 2,000-plus, but we've now come back to the same level of stores as we were in the first couple of quarters post-IPO about a year or so back.

That is where largely the EV industry is and where we were also fairly deep in penetration. We do expect a higher operating leverage even on the front end of the business model.

Now, the way this plays out is if you look at our gross margin today, per product our gross margin is almost ₹50,000 per product. Hence, break-even is close to about 15,000 units on a consolidated EBITDA.

This consolidated EBITDA includes all lease costs, there is nothing below this now. We've started reporting adjusted EBITDA, which is actually adjusted for adding lease costs into the operational expenses, so that the street can get a very clear, fully-loaded operating profitability lens.

At that level, we feel very confident of breaking even in this 15,000-odd volume levels. Now obviously, the focus is of the company to quickly get there by rebuilding service and brand trust and then letting the product benefit shine in the customer, which already is there.

It's there in the customer sentiment as well as in the product reality.

Bhavish, thanks for that really detailed answer. Just one small thing: anything that keeps you worried?

[laughs]

Sir, we have done a lot of good things in this company. We have built a lot of strength, which is not going to be easy for industry to catch up on.

Our competitive positioning is not really of a concern or a risk to us. Today the numbers are low, but that is because of the fundamental loop of delivering good service and hence letting the product shine.

The whole company, the leadership, me, we are super sharp-focused on the consumer, on making sure we raise our service quality levels for the customer so that the honest truth of the product can shine through.

Thanks, Bhavish, for taking my questions.

We'll take the next question from Mr. Chandramouli Muthiah of Goldman Sachs.

You may unmute yourself and ask your question.

Sorry, no, I don't think I raised my hand. Sorry, I'll just step back into the queue.

Okay. We'll take the next question from Ms.

Gayatri. You may unmute yourself and ask the question.

Ms. Gayatri V, you may unmute yourself and ask your question.

Okay. If there are any final questions, we'll wait for that.

If not, then we'll conclude the meeting post that.

Hello. Am I audible?

Hello. Hello, [unclear].

Hello.