Ola Electric Mobility Limited has reported its second quarter results for FY25, showing sequential deterioration in key metrics along with notable shifts in its product mix and financial metrics. However, on a year-on-year basis, the numbers continued to show improvement.
The company was listed on Indian bourses in August, and has seen significant fluctuations in its share price since then.
Delivery and Product Mix
The company delivered 98,619 vehicles in Q2 FY25, representing a significant decline from 125,198 units in Q1 FY25. Interestingly, there’s been a marked shift in the product mix, with mass-market vehicles gaining prominence. The mass segment accounted for 56,545 units, while premium segment deliveries dropped to 42,074 units. This represents a notable change in strategy from previous quarters where premium vehicles dominated the sales mix.
Financial Performance
Revenue for Q2 FY25 stood at ₹1,240 crore, down from ₹1,687 crore in the previous quarter. Despite the revenue decline, the company maintained a healthy gross margin of 20.3%, nearly flat compared to 20.5% in Q1 FY25. This suggests improved cost management and operational efficiency in its core business.
However, operating expenses increased to ₹604 crore from ₹508 crore in Q1 FY25, putting pressure on the bottom line. As a result, EBITDA loss widened to ₹353 crore in Q2 FY25 from ₹162 crore in Q1 FY25, with the EBITDA margin deteriorating to -28.4% from -9.6% in the previous quarter.
The company reported a net loss (PAT) of ₹495 crore for the quarter, higher than the ₹347 crore loss in Q1 FY25.
Compared to Q2 FY24, the company has shown significant improvement in several metrics. Deliveries have increased from 56,813 to 98,619 units, while revenue has grown from ₹896 crore to ₹1,240 crore. Notably, gross margin has improved substantially from 8.2% in Q2 FY24 to 20.3% in Q2 FY25, demonstrating better operational efficiency despite increased competition and market challenges.
The second quarter shows that increased operating expenses continue to impact overall profitability.
However, while the numbers do paint a picture of a sharp deterioration in the second quarter compared to the improving trend of the past three quarters, it should be noted that Ola Electric had seen a similar downtrend in the second quarter of the previous year too, when deliveries fell to 56,813 from 70,575 in the preceding quarter.
Ola Electric presently has 782 company owned stores as on September 2024, with each store delivering 130 sales on average per quarter. It plans to expand its company owned store (and colocated service infra) network to 2000 by March 2025.
Ola Electric has 6 models across a price range of ₹75,000 to ₹150,000. “The company is now focusing on entering other 2/3W categories, and over the next 2 years, would launch 20 products, with at least 1 new product launch every quarter,” it said.