Ola Electric’s Missing Pieces

Ola Electric is going through the toughest period in its seven-year lifetime. That’s no exaggeration as even the most ardent supporter of the Indian EV maker is starting to see how steep the uphill climb is.

Following its showdown with regulators and various government authorities in recent months, and allegations of sales inflation, Ola Electric saw its revenue slump 62% YoY to INR 611 Cr in Q4, which was also a 42% decline quarter-on-quarter (QoQ).

This tepid showing has once again piled the pressure on Bhavish Aggarwal. In a post-earnings call, Aggarwal called Q4 a “complex quarter”. However, he said that not only the regulatory issues but also the “confusion” related to February sales numbers were now behind.

Even so, one has to ask whether Aggarwal’s ambitious plans for Ola Electric’s next growth phase is missing one too many pieces.

Regulatory Overhang On Ola Electric

While some regulatory challenges might be behind the company after its overhaul of the registration process and distribution network in the past six months, things might not be as straightforward going ahead given its track record, according to experts.

Saharsh Damani, CEO of the Federation Of Automobile Dealers Associations (FADA), in a recent post on social media pointed out that once hailed as a disruptor, Ola Electric is now in the eye of a storm. “Disruption alone doesn’t guarantee sustainability. Culture, governance, and stakeholder trust matter more than hype,” he said.

Speaking to Inc42, Damani said that Ola Electric could initially take up the leading position in the EV two-wheeler industry because legacy players like TVS Motor, Bajaj Auto, Hero Motocorp, and Honda were absent from the market. Now, with these players gearing up their sales, and Ola Electric already reeling under pressure from every side, the future looks uncertain, he said.

Notably, the company’s revenue has gone below Ather’s in Q4 as the latter posted an operating revenue of INR 676 Cr.

“Ola Electric’s auditors have already raised questions on whether the company can remain a going concern in the coming days. Aside from the existing loss of trust, the recent death by suicide of an employee at Bhavish’s other entity, Krutrim AI, has made the situation worse for Ola,” said Damani.

Meanwhile, Damani is also of the opinion that the biggest uncertainty that looms for EV OEMs right now is the complete absence of subsidy for vehicles in the near future. For Ola Electric and every other electric two-wheeler company, this would be the biggest test in the coming days on whether they can survive this shift expected within a year or two.

“Whether it’s electric motorcycle delivery, cell manufacturing, or other new promises, we must keep an eye on how much they can truly execute. There has historically been a stark difference in the company’s promises and delivery,” said Damani.

A Wave Of Negative Investor Sentiment 

Despite brokerages giving a BUY rating to Ola Electric after the Q4 results, it is noteworthy that amid the struggles, institutional investors have routinely offloaded their shareholding in the company. Retail investors have suffered in the last six months as the Ola Electric stock has plunged by nearly 50% since December.

The company’s founder and chief executive Aggarwal reportedly paid around INR 20 Cr ($2.3 Mn) in cash to top up collateral for borrowings against shares on back of this sustained decline in share price.

Mutual funds have also been lowering their stakes in Ola Electric every quarter. In Q4, their stakeholding fell to 2.6% from 4.1% in the preceding December quarter (Q3), even as their broader market investments jumped. Their total stakeholding in the company fell despite the number of stakeholders growing from eight to 18.

Adding to the selling trends, Hyundai Motor Company has exited Ola Electric following a complete offloading of its 2.47% stake or 10.8 Cr shares in the company in June. This came together with Kia Corporation also selling a 0.62% stake or 2.7 Cr shares in the company in a bulk deal.

Mehta Equities’ Prashanth Tapse believes that institutional investors are now looking to take bets on Ather Energy and they might shift their investment strategy in this segment. Even for retail investors that are looking to invest in the two-wheeler EV space, he currently gives more weightage to Ather Energy over Ola Electric, given the former’s superior product quality and better management.

“However, I would also suggest investors have both companies in their portfolio for a better opportunity to tap into the industry growth,” said Tapse, adding that INR 40-INR 45 is a good range to buy Ola Electric shares for investors that want to take a risk.

 

He believes that shares of Ola Electric will continue to remain in the current zone in the next one to two quarters and might not experience a drastic decline, as existing shareholders are hopeful about cell manufacturing projections and penetration in the motorcycle market.

The Roadster launch — delayed by a few months — will be key. We will be diving into the electric motorcycle opportunity in India to understand how much Ola Electric can count on this segment. Watch out for that soon on Inc42.

The Missing Pieces In Ola Electric’s Turnaround Plans

After the major hiccups the EV giant faced in the recent months, the investors’ sentiment is clear — show results in numbers and not in words. And maths and figures are a major missing piece in its turnaround story.

Ola Electric had projected in February 2025 that it needed to sell 50,000 scooters per month to hit EBITDA breakeven. Three months later, in the Q4 investor meeting, the company reduced the number by half to 25,000 units, citing its cost reduction efforts. However, the matter has been puzzling for many shareholders and added to their questions around the company’s projection strategy.

Meanwhile, even as its Q4 FY25 gross margin declined to 19.2% from over 20% in the last three consecutive quarters, CEO Aggarwal has given extremely aggressive forecasts for Q1 FY26, solely based on its Gen 3 platform performance and PLI benefits.

On a revenue of about INR 800 Cr-850 Cr, the company is eyeing a gross margin of about 28%-30% by delivering about 65,000 EVs in Q1.

The calculations and the maths behind achieving these numbers largely remain vague. Even if all these are achievable, experts don’t see an easy way out for Ola Electric from the image it has created in the industry due to quality issues of its products and technology.

Now, with cell manufacturing becoming a main focus, industry leaders are concerned about possible forthcoming issues in this segment of Ola Electric’s EV stack as well.

Deb Mukherji, automotive veteran and advisor at Anglian Omega Group, said, “Cell making is an extremely complex process where companies take years to perfect the process. So, if a half-baked cell or a half-baked battery technology is launched in the market with great enthusiasm and in a hurry to meet projections, that is going to be a bigger problem because then there would be a great safety issue impending.”

Besides, Mukherji said that customers are still in doubt about its core product qualities and after-sales services.

“Problems can happen with any technology, and automotive is an industry which has seen a huge number of recalls, but OEMs take proper action. After such major issues that Ola Electric faced, the company should now become more transparent. It should publicly acknowledge all mistakes and assure customers that it will resolve the core problems before launching new technologies or products. The leadership, directors, and shareholders need to introspect now,” he added.

With the competition also growing stronger, the window for Ola Electric to capitalise on its initial hypergrowth is getting narrower. The likes of Bajaj, TVS and Hero MotoCorp are doubling down on the EV portfolio and have the manufacturing prowess to outpace Ola Electric.

Will Bhavish Aggarwal course-correct his strategy in time?

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Nazara’s ‘Smaaash’ And Grab

Gaming major Nazara Technologies’ acquisition spree continues unabated as the company has received the NCLT’s go-ahead to take over insolvency-ridden sports entertainment startup Smaaash Entertainment.

With Smaaash now fully integrated into its portfolio, Nazara appears to be betting on physical gaming venues as a strategic counterweight to its online operations. Its digital verticals are seeing slower growth or higher operating costs.

On the financial side, Nazara reported a sharp 53% QoQ drop in net profit to INR 4.1 Cr for Q4 FY25. Similarly, for the full year FY25, Nazara’s profit fell 32% YoY to INR 51 Cr while operating revenue grew 43% YoY to INR 1,623.9 Cr.

Heavy marketing spends by PokerBaazi, operated by Nazara’s associate Moonshine Technologies, dragged down profitability in the real money gaming vertical.

Markets Watch: New Issues, Financials & More

• LensKart’s IPO Vision: The omnichannel eyewear giant’s parent company has converted into a public entity, as it lines up plans for its initial public offering, details of which are currently unknown
• Zaggle’s New Deal: Enterprise tech major Zaggle is set to acquire Pune-based enterprise spend management startup Dice Enterprises Limited for INR 123 Cr (about $14.3 Mn) to strengthen its product portfolio
• Zepto Hits Pause: Quick commerce major Zepto has reportedly postponed its initial public offering (IPO) plans by a year and now plans to hit the bourses in 2026
• Thumbs Up For Swiggy: Morgan Stanley’s initiation of coverage for Swiggy came with an ‘overweight’ rating and a higher price target based on Swiggy’s improving execution in food delivery, expanding quick commerce TAM and aggressive investments

With inputs from Nikhil Subramaniam