Ola Electric Shares Crash 10% After Q4 Results

Shares of Ola Electric slumped as much as 9.7% to INR 48.07 during early trading hours on the BSE today, after the company reported its Q4 FY25 financial results.

Ola Electric’s net loss surged 109% year on year and 54% quarter on quarter to INR 870 Cr in Q4 FY25, driven by a sharp decline in revenue and a one-time warranty provision of INR 250 Cr. Revenue from operations during the quarter dropped 62% YoY to INR 611 Cr.

Kotak Institutional Equities has projected a 43% downside in Ola Electric’s share price, warning that it could fall to as low as INR 30 apiece. The brokerage downgraded the stock to ‘Sell’, citing persistent EBITDA losses amid intensifying competition and weakening brand equity.

However, by 11:35 AM, the stock pared some losses to trade 5.65% lower at INR 50.23 on the BSE. At that time, the company’s market capitalisation stood at INR 22,168.83 Cr, with a trading volume of 4.7 Cr shares.

A Short History Of Ola Electric Stock

The stock has now declined 68% (at current market price) from its 52-week high of INR 157.53, recorded on August 20 last year, just days after its listing on August 9, 2024.

While Ola Electric’s shares were listed flat at INR 76 per share on both the NSE and BSE, the stock more than doubled within two weeks. However, after this brief rally, it began to decline steadily, hitting an all-time low of INR 45.55 last month.

The company has consistently reported losses in its quarterly results, a trend that continued into Q4 FY25. Not just the bottom line, substantial decline in sales growth along with problems in operations, regulatory and reputational challenges, and missing key production targets for government subsidies have also contributed to the downward trajectory of its shares since last year. 

Operationally, it faces product quality and after-sales service problems, which led the Central Consumer Protection Authority to issue it a show-cause notice after receiving over 10,000 customer complaints since 2023. 

The company is also facing scrutiny for operating some of its retail stores without the necessary trade certificate. This lack of certification has resulted in government authorities across multiple states issuing notices and launching probes, with some stores being closed and vehicles seized.

Also, at the onset of the year, a significant discrepancy between Ola Electric’s claimed sales and Vahan registration numbers (25,000 vs 8,000) led to scrutiny from the Heavy Industries Ministry and SEBI.

The Bhavish Aggarwal-led company has also experienced a significant loss in its market, a 56% YoY drop in deliveries to 51,375 units in Q4 FY25.

The Silver Lining

Despite all these, Ola Electric is focusing on turning its auto segment EBITDA profitable in FY26. 

While the company entered the ebike segment after a lot of delays last week, Aggarwal in the Q4 FY25 earnings call said that the rollout of the mass market variant of Roadster X received a positive response from its customer base and the company plans to begin the deliveries of two more models under the Roadster series in the near future.

The other pillar to strengthen its position is cell manufacturing, and the EV maker in Q4 said it has made progress in its EV cell manufacturing capabilities. Aggarwal said that the company will achieve 5 GWh capacity by early FY27. 

In FY25, the company invested $100 Mn to initiate ‘phase 1A’ of the Gigafactory with 1.5 GWh of cell manufacturing capacity. The factory was initially expected to reach a 5 GWh output capacity by October 2024 and subsequently expand to 20 GWh. However, it is yet to achieve the 5 GWh capacity. On the delays, he said that Ola Electric is being very methodical and calibrated in its cell project. 

It is pertinent to note that Ola Electric faces a penalty of INR 12.5 lakh per day for failing to meet its commitments under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage PLI scheme.