Ola Electric faces investor ire after Q4 results disappoint Street
It was the first time during a quarter that revenue from operations of the leading e-scooter player fell below Ather Energy, which ranked fourth in the total electric scooter sales hierarchy.
Ola Electric’s investors’ rush to sell their stake in the company led to a nearly ₹1,000 crore loss in its valuation on the stock markets on Friday.
Company’s shares tumbled 4.2%, trading at ₹50.96 per share on Friday, as revenue from operations slid more than 60% to ₹611 crore and net loss more than doubled to ₹870 crore during the January to March period. For the full financial year, the company’s total loss was at ₹2,276 crore, and last year the loss was ₹1,584 crore.
Notably, it was the first time during a quarter that revenue from operations of the leading e-scooter player fell below Ather Energy, which ranked fourth in the total electric scooter sales hierarchy.
The revenue fall was due to a decline in total registered sales to 56,642 from 120,132 electric scooters.
“The one-time factors led revenue to be what it was for last year and the last quarter. We have now shifted our registration process in-house, which has significantly reduced the time between accepting registrations and selling and invoicing. We’re also taking a company-wide cost reduction project, and in Q1 FY26, we’ll see the impact of that," Ola Electric’s founder and managing director, Bhavish Aggarwal, said during the earnings call on 29 May.
Declining sales in the last few quarters also seemed to have weighed on institutional investors. Since the company went public in 2024, institutional investors' stakes in the company have been falling. Foreign and domestic institutional investors have reduced their stake from a combined 9.3% to 5.8% shareholding.
At the end of 31 March 2025, the promoter's stake in the company stood at 36.78%, while the public investor's share increased by nearly 1% to 52.14%.
Kotak ratings
“We expect Ebitda losses to continue amid weakening brand equity and increased competitive intensity. Ola Electric’s future hinges on scaling up volumes and a successful motorcycle foray, which faces executive and credibility challenges," Rishi Vora of Kotak Institutional Equities wrote in a 30 May note.
Kotak downgraded the stock to a sell rating with a target price of ₹30 from ₹50 earlier.
To assuage investors' concerns, Aggarwal highlighted that the cost reduction efforts, which, according to the company’s disclosures, started in November 2024, helped save ₹90 crore per month. Due to the savings, it will require just 25,000 monthly sales to achieve Ebitda break-even, down from the target of 50,000 sales it shared previously.
The management estimates that Ebitda breakeven will occur sometime in the July-September period of the current financial year, which is later than the previously released estimate for the April-June period.
Analysts at Goldman Sachs cut the target price of Ola Electric’s share from ₹75 to ₹70 but suggested that there are expectations about a gradual improvement in volumes in the coming quarters. The global brokerage retained its buy rating on the company.
“The e-motorcycle is expected to start driving a gradual pickup in volume run-rates, though we would still watch for any surprises on the warranty cost side given the company’s young vintage in the automotive industry," Chandramouli Muthiah and Kota Yuzawa of Goldman Sachs wrote in a 30 May note.
The cautious commentary from analysts came a few weeks after the credit rating of the company’s key subsidiary, Ola Electric Technologies, responsible for selling the scooters, was downgraded byIcra to BBB-.
Icra ratings
“The downgrade of ratings and continuation of the Negative outlook are due to slower-than-expected scale-up in OET’s electric two-wheeler (e2W) sales volumes, which has resulted in a longer-than-expected period of cash burn and has elongated the road to the company's profitability," Icra said in a note dated 1 May.
In FY2025, Ola Electric’s sales rose just 5% to 344,009 electric scooters, amid a more than 100% surge in sales of Bajaj Auto Ltd’s electric scooters to 230,806 units. TVS Motor Co. Ltd also saw a 30% increase in its electric scooter sales to 237,576 units.
Ather Energy, which waslisted on the stock markets earlier this month, saw a 29% rise in revenue to ₹676 crore and an 18% narrowing of its net loss to ₹234 crore.
topics
