Ola Electric Q1 results: Net loss widens to Rs 347 cr, hurt by price cuts

The company, which made its trading debut last week, said its loss widened to Rs 347 crore ($41.4 million) in the April-June quarter from Rs 267 crore

India's top e-scooter maker Ola Electric reported a bigger quarterly loss on Wednesday, hurt by subsidy cuts and a surge in depreciation costs, but said it was inching closer to breaking even in a key profit metric.

The company, which made its trading debut last week, also said it would equip its e-scooters with its own batteries by this time next year, which is key to its profitability target.

Since launching its first model three years ago, Ola Electric has grown to command a 39 per cent share of two-wheeler EV sales in the country in July, per government data.

Ola Electric's loss increased to Rs 347 crore ($41.4 million) in the April-June quarter from Rs 267 crore in the year-ago quarter.

The latest quarter included a one-time expense of Rs 23 crore to account for the drop in incentives after the government halved its subsidies on purchases of electric vehicles.

Ola Electric's depreciation costs nearly tripled in the quarter, but the company did not give a reason for that.

However, before accounting for depreciation as well as amortisation, interest and taxes, Ola Electric's profit margin was negative 1.97 per cent in the auto business, which accounts for 99 per cent of its revenue.

This was a sharp improvement from last year's negative 8.29 per cent so-called EBITDA margin, which is a key gauge of operational profitability.

Ola Electric, which has three e-scooter models, slashed prices of its cheapest model in April to boost demand after the government reduced subsidies.

Its overall sales volume increased 57 per cent in the quarter, boosting revenue by 32.3 per cent to Rs 1,644 crore.

In the year ended March, Ola Electric's revenue surged 90 per cent as sales volumes more than doubled.

Expenses increased 27 per cent in the latest quarter. The rise in its costs slowed to 62 per cent last year from a three-fold jump in the previous year.

The company's stock has surged 46 per cent since making a sparkling stock market debut last Friday. 

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