Ola Electric's net loss widens in Q1 as costs mount for the public EV maker
Ola Electric’s earnings results, which came days after going public, saw a 32% YoY rise in quarterly revenue buoyed by rising demand for its products.
Ola Electric reported a wider net loss for the three months ended June 30, 2024, bogged down by higher costs.
The electric scooter maker, which leads the market of electric two-wheelers, reported a first-quarter net loss of Rs 347 crore compared with the Rs 267 crore loss incurred in the same period a year ago.
The Bengaluru-based company also reported a one time expense of Rs 23 crore related to reversal of production linked incentive that was accrued in the previous financial year.
However, the company reported a 32% year-on-year (YoY) rise in its quarterly revenue to Rs 1,644 crore in Q1 FY25, buoyed by a rise in demand for its two-wheelers. Deliveries increased to 1,25,198 units in the latest quarter compared with 70,575 units in Q1 FY24.
Total expenses in the quarter rose 26.5% YoY to Rs 1,849 crore, led by an increase in the cost of materials consumed.
Ola Electric, in the post-earnings investor call, added that it saw heightened demand for its relatively low-priced Ola S1 X series, which was launched in Q3 FY24.
The company, which is all set to roll out its motorbikes on August 15, said it will aim to capture a share of the motorbike market which currently constitutes around 65% of the overall two-wheeler market.
In a pre-IPO event held in Bengaluru, Ola Electric's Founder Bhavish Aggarwal mentioned that the company is banking on rising volumes, lower costs, and in-house manufacturing of its new lithium batteries to lead its path to profitability.
It competes with companies like Ather Energy, which is the latest entrant in the unicorn category, and established automobile giants like Hero MotoCorp and TVS Motors.
Ola Electric listed on the stock exchange on August 9. Its shares began trading flat but quickly surged by about 20% on its first day of trading, hitting the upper circuit and valuing the company to about $4.8 billion.
In the post-earnings call, the company added that it would be reporting under two segments—automotive, which includes the sale of automobiles and related services, and the cell segment.
The automotive segment posted an improvement in quarterly EBITDA margin at negative 1.97% compared to negative 8.29% last year.
Aggarwal said that the company will start integrating its new 4680 Bharat Cell into its vehicles beginning Q1 FY26.
At the close of business hours on Wednesday, before Ola Electric’s results were announced, the company’s shares were down by 2.9% at Rs 110.64 apiece on BSE.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)
(The copy has been updated to add comments from the investor call)
Edited by Kanishk Singh