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Indian Express
16-06-2025
- Business
- Indian Express
From Rs 146 peak to Rs 48 trough: Inside Ola Electric's stock plunge
What if a company sold 30% of all electric scooters in India, yet saw its revenue plunge and losses mount? Ola Electric Mobility finds itself in that paradox. It's a leading player in the Indian e-scooter market, holding a 30% market share in terms of volume, but in the latest quarter, its sales fell below a rival's for the first time. Investors who cheered its rapid growth are now asking a tough question: Can Ola Electric turn today's hefty losses into tomorrow's profits? Its stock, which hit a peak of Rs 146 per share, is currently trading at Rs 48 per share. The question now is: Can Ola Electric pull off a comeback? Ola Electric's financial journey has been volatile. The company recorded operating income of Rs 2,651 crore in FY23, which doubled to about Rs 5,103 crore in FY24. But FY2025 told a different tale: revenue slipped ~9% to Rs 4,645 crore. This dip came even as Ola Electric delivered more scooters than ever – 3.59 lakh units in FY25, up from 3.29 lakh the previous year. How do sales grow while revenue falls? The answer lies in product mix and pricing. Ola Electric introduced lower-priced models like the S1 X, which drove mass adoption (196,000 S1 X scooters sold in FY25, a 3.5x jump YoY), but at the cost of a lower average selling price. Essentially, Ola sold more scooters for less money each, a trade-off between volume and value. Profitability has been elusive throughout this growth spurt. Ola Electric remains deep in the red, with net losses widening to Rs 2,276 crore in FY25 from Rs 1,584 crore in FY24. In Q4 FY25, revenue plunged ~60% year-on-year to Rs 649 crore, and the net loss widened to Rs 870 crore. Ola Electric's EBITDA dropped to -101% in Q4 FY25. The loss was further accentuated because of a one-time warranty provision (Rs 250 crore) on its Gen 1 and 2 scooters that faced customers' ire for poor performance. For the full year, EBITDA margin was -34.6% (vs -22.5% in FY24). Simply put, Ola spent far more per scooter than it earned. Why the wild swings in sales and EBITDA margins? Industry cycles and policy changes played a role. When the FAME-2 EV subsidies ended in April 2024, it was like removing a turbocharger from the market. Industry-wide sales took a hit as electric two-wheelers became more expensive overnight. Ola Electric felt this as quarterly deliveries (units) dropped from 1,25,198 in Q1FY25 to 51,375 in Q4FY25. Competition also revved up: traditional motorcycle giants Bajaj Auto and TVS Motocorp jumped into the electric race, grabbing a combined 40% high-speed e-scooter market in FY2025 (up from just 7% in FY2022). As these well-funded incumbents ate into the pie, Ola Electric's growth moderated. Sales volumes in FY25 grew only 9% (3.59 lakh units vs 3.29 lakh units) after doubling in earlier years, showing how a more crowded market and Ola's operating issues, such as VAHAN registration (February 2025) and service-related challenges, slowed its momentum. Even Ather Energy overtook Ola Electric in revenue during Q4 FY25 (Rs 676 crore vs Rs 611 crore – Ola). So, what's Ola Electric's response? It recognised that profitability would require relentless cost-cutting and scale. It embarked on Project Lakshya, a cost reduction drive, and Project Vistaar, a network expansion and efficiency programme. Project Lakshay's target by June 2025 was to bring fixed burn rate to 110 crore per month (vs 121 crore in April 2025. It also says that the EBITDA breakeven in the auto segment is now down to 25,000 units. Ola currently sells about 360,000 scooters a year. They have a fixed bill — rent, salaries, electricity — that they're aspiring to bring down to Rs 110 crore every month. Their expectation is: 'If we sell 25,000 scooters a month, that should pay all those fixed bills.' To do that, each scooter needs to earn Rs 44,000 before fixed costs (because Rs 110 crore ÷ 25,000 scooters = Rs 44,000). Last year, Ola Electric sold a scooter for about Rs 1.3-1.56 lakh (reported revenue/units sold). So earning Rs 44,000 profit from Rs 1.3-1.56 lakh price is like keeping 28-34% as margin before fixed costs. In super simple terms: If they can make that much on each scooter and keep selling as many as last year, they will start breaking even on an operating profit level. However, hitting Rs 44,000 per unit or 28-33% of sales can be challenging. Does this 28-33% constitute gross margin? Does this constitute gross margin minus variable costs? In its Q4FY25 shareholder letter, Ola Electric has mentioned that it expects gross margin to go up to 36.5%, including PLI in Q2FY26. Comparison with peers A comparison with Bajaj Auto, TVS Auto, and Hero MotoCorp reveals that Ola's expectation of gross margin/margin before fixed costs of 28-33% may be optimistic. For compariosn, Bajaj Auto earns a gross margin of 30-32% and an EBITDA margin of around 20%. Though it must be pointed out that Ola Electric is a pure EV scooter company, while the competition still makes a large chunk of its revenues from internal combustion engine (ICE) scooters and other two-wheelers. Ola Electric is also vertically integrated, something that ICE players are not. Perhaps it is counting on this vertical integration to eke out higher gross margins in its auto segment. Management is optimistic Ola Electric's founder, Bhavish Aggarwal, called Q4 FY25 'a quarter of a major transformation.' He pointed out that Ola Electric only counts a sale upon delivery, not booking, so a backlog in registrations meant revenue got pushed out of Q4 into Q1. By the end of Q1 FY26, that issue will be resolved. Ola Electric pre-announced a revenue guidance of Rs 800-850 crore, along with a gross margin improvement to 28-30% for Q1 FY26 (and 36.5% in Q2FY26), a notable jump from Q4's 19% margin. In short, management is signalling that the worst may be behind them. They emphasise that cost cuts (Lakshya) and network fixes (Vistaar) are largely done, and the foundation is set for a rebound. Poor cash flow position While an 'EBITDA breakeven goal' is great if a startup is headed towards an IPO listing, for a listed company, it's cash flows that matter. Something Ola Electric does not have yet. The company is burning cash. In FY25, Ola Electric's operating cash flow was a negative Rs 2,391 crore, exceeding its accounting loss for the same period. Inventories piled up when sales sputtered, tying up cash in unsold scooters and parts. The company's interest coverage ratio is negative, too, reflecting that operating earnings can't cover even the modest interest on its debt. Notably, Ola Electric's finance costs increased to Rs 366 crore in FY25 from Rs 186 crore in the previous year, partly because it raised debt for its projects. In the absence of any cash flow from operations, on May 22, 2025, the company's board approved a fund raising of Rs 1,700 crore of '(i) term loans, working capital facilities; or (ii) issuance of Non-Convertible Debentures (NCDs) or any other eligible debt securities' Valuation and investor perspective Given Ola Electric Mobility's potential liquidity issues, operating losses, inadequate cash flows, and increasing competition from incumbents and newer entrants, it's challenging to peg a valuation to the company. However, on a price-to-book basis, a 4.2x book value may seem low. Ola Electric Mobility's lower valuation versus peers may be justified, given where the numbers stand currently. For the stock to re-rate materially, it must demonstrate the ability to scale up in volume terms and at least hit EBITDA breakeven. Note: We have relied on data from and throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. Rahul Rao has helped conduct financial literacy programmes for over 1,50,000 investors. He also worked at an AIF, focusing on small and mid-cap opportunities. Disclosure: The writer or his dependents do not hold shares in the securities/stocks/bonds discussed in the article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
Time of India
29-05-2025
- Automotive
- Time of India
Ola Electric's Q4 losses deepen as deliveries slide, revenue nearly halves
Ola Electric's Q4 losses deepen as deliveries slide, revenue nearly halves BENGALURU: Ola Electric reported a steep deterioration in its March quarter performance, with adjusted revenue plunging to Rs 649 crore in the period ended March 2025, from Rs 1,641 crore a year ago, a near 60% decline. Consolidated net loss widened to Rs 870 crore for the quarter, compared to Rs 417 crore in Q4 FY24. Ebitda loss for the quarter expanded to Rs 658 crore, with margins slipping to -101.4%, indicating rising cost pressures and limited operating leverage. Deliveries fell sharply to 51,375 units in Q4 FY25, down from 1.15 lakh units in the same period the previous year. Premium segment deliveries dropped nearly 76% year-on-year to just 15,764 units in the quarter. For the full year, adjusted revenue dropped 9% to Rs 4,645 crore. Total FY25 losses stood at Rs 2,276 crore, compared to Rs 1,844 crore in FY24. Ola Electric continues to report negative Ebitda margins for all four quarters of FY25, underscoring persistent challenges in its path to profitability. While the company's gross margin improved to 20.5% for FY25 from 14.8% in the previous year, Q4 margins dipped sequentially. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo Operating expenses continued to rise, hitting Rs 779 crore in Q4 FY25. The company also booked a Rs 250 crore warranty-related provision during the quarter for its Gen 1 and Gen 2 scooter models. Ola's management attributed the Q4 performance to weak urban demand and underperformance in the premium segment. The company is now banking on its lower-cost S1 X and the newly launched Roadster X motorcycle to revive momentum in FY26. However, analysts flagged concerns around demand visibility and the lack of sustained scale, especially as overall E2W market growth tapers. The company said it has structurally reduced its auto segment Ebitda breakeven to under 25,000 monthly units, but sustained breakeven volumes have yet to be achieved. Ola is also preparing to scale battery cell production at its Gigafactory, though commercialisation timelines remain uncertain. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
29-05-2025
- Automotive
- Business Standard
Ola Electric Q4 results: Loss widens to ₹870 crore, revenue declines 59%
Ola Electric Mobility's loss widens to ₹870 crore in the fourth quarter of financial year 2024-25, it was ₹416 crore in the same quarter of last year. The revenue from operations declined 59.5 per cent to ₹611 crore in Q4FY25, the company had reported the same as ₹1,598 crore in the corresponding quarter last year. Ola Electric reported a 38 per cent year on year improvement in gross margins for the financial year 2024–25 (FY25). The company expects gross margins in the first quarter of FY26 (Q1 FY26) to improve by an additional 10 per cent over the fourth quarter of FY25 (Q4 FY25). The company also highlighted that through initiatives like Project Vistaar and Project Lakshya, it has successfully reduced the Auto segment EBITDA break-even point to below 25,000 units per month, further supporting its path to profitability. In FY25, Ola Electric delivered 359,221 units, marking a 9 per cent year on year increase from 329,549 units in FY24, thereby maintaining its leadership position in the electric two-wheeler (E2W) segment and contributing to higher electric vehicle penetration. The mass adoption of EVs was driven largely by the success of the S1 X model, which achieved deliveries of 1,96,123 units in FY25, reflecting a more than 3.5-fold year on year increase from 53,083 units in FY24. The company also expanded its product lineup with the launch of the Gen 3 S1 scooters and Roadster X motorcycles. In addition to product and sales growth, Ola Electric expanded its distribution network to over 4,000 touchpoints, establishing itself as India's largest EV distribution network with significant reach into Tier 3 and rural markets.
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Business Standard
29-04-2025
- Business
- Business Standard
Discounts and deals for Akshaya Tritiya: Gold, homes, scooters, travel
Akshaya Tritiya, the annual festival considered auspicious for prosperity and investments, is a chance for various companies to roll out offers. Some are giving cash backs on home purchases, free gold on discounted electric scooters, and exclusive shopping deals. Here is more about such offers. Jio Gold offers up to 2 per cent Free Digital Gold Jio Financial Services has launched the first edition of Jio Gold 24K Days, offering customers up to 2 per cent additional digital gold on purchases made via the JioFinance or MyJio apps, starting from as low as Rs 10, from April 29 to May 5, 2025. 24 grams of gold Rs 2.40 lakh cash back 2 BHK homes starting at Rs 1.92 crore, 3 BHK homes from Rs 2.65 crore. 'We're offering not just a premium lifestyle at Sion NX, but also exclusive festive benefits — 24 grams of gold and Rs 2.40 lakh cashback — as a token of celebration,' said Samyak Jain, director, Siddha Group. ALSO READ | Light-weight jewellery to drive gold demand this Akshaya Tritiya: Experts Alta Monte at Malad (W) has announced: 100 grams of gold on every booking for Premium 2, 3, and 4 BHK residences starting at Rs 2.96 crore with 30+ lifestyle amenities. "Akshaya Tritiya has always symbolised prosperity and new beginnings — values that align perfectly with the aspirations of today's homebuyers," said Umesh Jandial, chief business officer at Alta Monte. JP Infra is offering white goods and furniture vouchers for people who buy its houses. 'Our endeavor is to ensure that every customer finds not just a home, but an elevated lifestyle experience,' said Deepak Nair, head of marketing, JP Infra. Ola Electric gives scooter discounts Ola Electric has announced a ' 72-Hour Electric Rush ' offer for its scooters till April 30. The offer has: Discounts of up to Rs 40,000 on the Gen 2 and Gen 3 electric scooters Free extended warranty on all models Same-day scooter delivery in select states Customers can buy Gen 2 S1 X scooter at prices starting Rs 67,499, while Gen 3 scooters like S1 Pro+ start at Rs 1,88,200. Ola Electric said in a statement: 'Customers can enjoy discounts, free extended warranties, and the excitement of riding home on a fully registered scooter within hours, making Akshaya Tritiya celebrations even more special'. Shopping, travel, jewellery deals BOBCARD Limited is offering a wide range of festive discounts across top brands:
Business Standard
28-04-2025
- Automotive
- Business Standard
Ola Electric announces 72-hour Rush sale with special offers for Akshaya Tritiya
Ola Electric Mobility announced 72-Hour Rush including special offers and benefits on the entire S1 portfolio ahead of the auspicious occasion of Akshaya Tritiya. As part of the 72-Hour Rush, customers can avail discounts of up to Rs 40,000 on Gen 2 and Gen 3 models, along with free extended warranty. The Gen-2 models now start at Rs 67,499, while the Gen 3 models start at Rs 73,999. Customers in select states can enjoy #HyperDelivery (same-day delivery) on their new Ola scooters, making their Akshaya Tritiya celebrations even more special. The offers will be valid starting today, till 30 April. Along with the expanded Gen 3 portfolio of scooters, the company continues to retail its Gen 2 scooters with S1 X (2kWh, 3kWh, and 4kWh) now starting at Rs 67,499, Rs 83,999, and Rs 90,999, and S1 Pro starting at Rs 1,11,999. The company's Gen 3 portfolio consists of the flagship S1 Pro+ 5.3kWh and 4kWh now starting at ₹1,88,200, and ₹1,48,999, respectively. The S1 Pro, available in 4kWh and 3kWh battery options, is now starting at ₹1,29,999 and ₹1,12,999, respectively. The S1 X range is starting at Rs 73,999 for 2kWh, Rs 92,999 for 3kWh, and Rs 1,04,999 for 4kWh, with S1 X+ available with the 4kWh battery and priced at Rs 1,09,999. Ola Electric also rolled out same-day delivery and registration of vehicles under #HyperDelivery. Pilot of #HyperDelivery has started in Bengaluru, and is being scaled up across India during this quarter in a phased manner. Customers can now complete their purchase online or at an Ola Electric Store and ride home on their fully registered vehicles in just hours. The company recently rolled out the first Roadster X motorcycle from its Futurefactory. The Roadster X series offers a breakthrough in motorcycle technology and comes with first-in-segment patented brake-by-wire technology with single ABS, and smart MoveOS 5 features such as advanced regeneration, cruise control, and reverse mode. The battery system of the Roadster X series gets an IP67 waterproof and dust-proof certification, advanced wire bonding technology, and a serviceable Battery Management System (BMS) enabling easy maintenance.
