Ola Electric Q3 results: Net loss widens to Rs 564 cr, revenue drops 19%

Electric two-wheeler maker Ola Electric Mobility on Friday reported a net loss of Rs 564 crore for the third quarter of FY25. The company’s net loss widened from Rs 376 crore in the year-ago quarter.

 

Ola Electric reported a net loss of Rs 495 crore for the quarter ending September 2024.

 

Its revenue from operations in Q3FY25 dropped 19.36 per cent to Rs 1,045 crore, down from Rs 1,296 crore in the same period last year (YoY).

 

“October saw strong performance fueled by festival sales, however the overall quarter was weak due to high competitive intensity and service challenges. We’ve fixed the service issues and with our network expansion, turned the tide on market share and margins. In January, we’re back to market leadership with an expected gross margin of approx 26 per cent , up from 20.4 per cent in Q3 FY25,” Ola Electric said in the shareholders’ letter.

 

 

The company’s automotive gross margin improved by 20 bps QoQ to 20.8 per cent in Q3 FY25, despite a 14 per cent QoQ decline in revenue to Rs 1,075 crore due to intensified competition and festive discounts. 

 

“This resilience was driven by 1pp QoQ reduction in BOM costs and the benefit of PLI accruals across our product range,contributing a 5pp margin uplift. In Q3, these gains were largely reinvested to drive growth,” said the shareholders’ letter. “In January, we continued to see BOM reduction contributing 1pp and discount reduction contributing 4pp towards

 

Gross Margin improvement. We expect Gen 3 savings to start coming in from February onwards and Gross Margin through Q4 and beyond continuing to improve. All these efforts give us significant Gross Margin advantage over competition and if discount intensity remains aggressive, we will reinvest part of this into growth.”

 

In Q3 FY25, Ola Electric’s Consolidated EBITDA, excluding exceptional costs such as warranty and one-time employee-related expenses, declined to -29.2 per cent, compared to -19.4 per cent in Q2 FY25. Similarly, the Auto Segment EBITDA, excluding exceptional costs, dropped to -18.5 per cent, vs -12.8 per cent in Q2 FY25. Excluding exceptional items, the key drivers impacting the movement in EBITDA included higher sales and marketing expenses during the festive season. Other factors included ongoing distribution network expansion and  adverse impact of operating leverage.

 

The company's total expenses came up to Rs 1,505 crore in the quarter under review. 

 

For the nine-month period ending December 31, Ola Electric's consolidated revenue reached Rs 4,204 crore, reflecting a 17.7 percent increase. However, the net loss for the period grew by 20.4 percent, totaling Rs 1,406 crore.

 

The company said it expects their path to profitability to be driven by improvements in gross margin and optimization in operating costs. It also includes operating leverage through product portfolio expansion, category expansion and technology leadership.

 

Ola Electric said it maintained leadership position through Q3 FY25 with a 25.5 per cent market share (as per VAHAN data) driven by the company’s singular EV focus, strong product portfolio and technology leadership. 

 

Further to this, the company retained market share leadership in Jan’25 (As per VAHAN) with an uptick in Gross Margin of approx 26 per cent (provisional and unaudited) up from 20.4 per cent in Q3 FY25.

 

In December, Bajaj Auto claimed the top spot in EV two-wheeler sales with a 25 percent market share, selling 18,276 units. TVS Motor followed closely with a 23 percent share, selling 17,212 units, surpassing Ola Electric for the first time in months. However, Ola regained the top position in January.

 

The company also said that its in-house 4680 Bharat Cell is on track for commercialisation, and Module level testing for integration of these Cells in its vehicles have commenced in Q3 FY25 with vehicle deliveries starting Q1 FY26. “The company will continue to invest in Cell R&D and has commenced work on the Gen 2 NMC Cell, which will have higher energy density and LFP Cells for Automotive and BESS (battery energy storage systems) applications,” said the firm.