OLA Electric, the brainchild of Bhavish Aggarwal, has seen a significant slowdown in its stock momentum recently. After hitting a peak of ₹157 on August 19, the stock has now dropped to around ₹131. In response to these fluctuations, Aggarwal announced a comprehensive plan aimed at increasing production, streamlining the supply chain, and optimizing domestic manufacturing for profitability. Although the plan to develop electric cars has been temporarily set aside, the focus remains on creating products that meet the needs of the Indian market, particularly in the two-wheeler and three-wheeler segments.
Expansion into Electric Motorcycles
Last week, OLA Electric ventured into the electric motorcycle segment, marking a new chapter for the company. Aggarwal emphasized that it is possible to improve profitability while also investing for rapid growth. A structured profit framework from tax-before-income to tax-after-income has been established. The company is continuously working on two or three strategies that are expected to enhance profitability in the upcoming quarters.
Stock Price Concerns
While discussing the prospects for profitability, Aggarwal noted concerns about the stock price doubling from its listing price of ₹76. Investors are keen on understanding how the company plans to stabilize and grow its revenues amidst ongoing financial challenges.
Pathway to Profitability
Aggarwal underscored that the company’s sales profitability roadmap is crucial. With the integration of cell production into their own products, there’s optimism for profitability by the start of the next year. OLA Electric previously announced plans to integrate 4680 cells into their vehicles starting from the first quarter of the fiscal year 2025-26. This move is expected to significantly enhance production efficiency and reduce costs.
Financial Overview
Despite the plans for different strategies, Aggarwal clarified that the company has not set a specific timeline for achieving profitability. In the April-June quarter, OLA Electric recorded an integrated loss of ₹347 crore, a rise from a loss of ₹267 crore during the same period last year. The total net loss for the fiscal year 2023-24 was reported at ₹1,586 crore.
Focus Away from Electric Cars
Regarding entering the electric car segment, Aggarwal stated that OLA Electric is not working in that direction currently. The primary goal remains to create products that are relevant for the Indian consumer, and to develop technologies that facilitate mass production of those products.
Future Projections
In conclusion, OLA Electric is adjusting its operational strategies while remaining committed to developing affordable and relevant electric mobility solutions for the Indian market. The company is poised for potential growth as it pivots its focus towards more profitable segments and seeks to establish its presence in the electric motorcycle industry.
