Ola Electric’s Q2 loss narrows as revenue jumps almost 40%

Ola Electric's net loss narrowed in the second quarter of the current financial year (FY25) as the Bhavish Aggarwal-led EV maker reported a 39% jump in sales.

Ola Electric reported a net loss of Rs 495 crore for the July-September quarter, down from Rs 524 crore in the year-ago period. The company's revenue from operations jumped to Rs 1,214 crore in Q2 from Rs 873 crore a year earlier.

However, on a quarterly basis, Ola Electric's loss widened from Rs 324 crore in the April-June quarter. The company's sales declined from Rs 1,644 crore in the previous quarter.

In a shareholder letter, Ola Electric said that it delivered 98,619 scooters in the quarter, up 74% from the previous year. Ola Electric's gross margin also improved by 12 percentage points to 20.3%, the company said, while it managed to bring down its EBITDA margin by 18 percentage points to -28.4%.

The results come days after the EV-maker’s share price fell below its listing price, two months after the company listed on Indian stock exchanges. On Friday, Ola Electric's share price closed at Rs 72.67 apiece, down 2.53%. Ola Electric got listed on India's stock exchanges on August 9 at Rs 76 per share. The company had hit an all-time high of Rs 157.40 apiece.

Ola Electric, currently the market leader in the E2W segment, has also come under intense scrutiny over rising consumer complaints pertaining to its vehicles. In September, the EV marker sold fewest vehicles so far this year and saw its market share dropping below 30% for the first time this year. For the July-September quarter, Ola Electric's market share dropped to 33% from 49% in the previous quarter.

Adding fuel to the fire was a public spat on X between the company's founder and CEO, Aggarwal, and comedian Kunal Kamra over the weekend. Kamra criticised the company's customer service, gaining widespread support on social media. Many users on the platform also expressed difficulty in dealing with the company’s customer service. 

In October, the company received a show cause notice from the Central Consumer Protection Authority (CCPA) seeking alleged violations of consumer rights, misleading advertising, and unfair trade practices.

The company, in a BSE filing on October 22, said it has provided all requested information and clarification sought by the consumer watchdog. Additionally, Ola Electric said it resolved 99.1% out of 10,644 complaints it received from the CCPA.

The company, in the shareholder letter, clarified that it faced a capacity issue over the last couple of months due to its service capacity growth lagging behind its sales volume growth. However, Ola Electric reiterated that it has resolved almost all the backlog and that it is now processing about 80% of service requests in T+1 days. 

The SoftBank Group-backed firm has since doubled down on expanding its service centres and hiring service technicians to help streamline operations and clear backlogs.

(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric.)