Okinawa’s revenue crosses Rs 800 Cr in FY22, profits rise 16X

Gurugram-based electric two-wheeler manufacturer Okinawa Autotech showed a fantastic set of results in FY22. The company scaled around 7X to Rs 822 crore during FY22 from Rs 118 crore in FY21, as per the financial statements filed with the Registrar of Companies (RoC).

Seven-year-old Okinawa has launched eight different electric two-wheeler vehicles including Praisepro, IPraise+, Okhi-90, Ridge+, LITE, R30, and Dual to date. The sale of these products is the only source of operating revenue for the company. Around 91% of the total collection came from the sale of vehicles while the rest of the income is from the sale of spare parts and scrap.

Founded in 2015 by Jeetendra Sharma, Okinawa was the first EV company to see its customers benefit from the FAME II subsidy from the Government of India. In the year 2021-2022, the company claims to have achieved a sales milestone of about 1,00,000 units. As per the company, more than 90% of its components are sourced locally.

For the two-wheeler manufacturing firm, the cost of procurement was the largest cost center forming around 89% of the total cost which surged 7.5X to Rs 627 crore in FY22. During the period, employee benefits expenses rose 4X to Rs 24.5 crore whereas the cost of advertising and promotion for the company also grew 3.8X to Rs 16.2 crore in FY22.

Okinawa added another Rs 18 crore as freight cost pushing overall cost 6.3X to Rs 701 crore in FY22 from Rs 111 crore in the preceding fiscal year (FY21).

With around 7X growth in its scale, the profits of the company jumped 16.3X to Rs 89.5 crore in FY22 from Rs 5.5 crore in FY21. Backing strong fundamentals, the company spent Rs 0.85 to earn a single unit of operating revenue.

Coming to the ratio, the company has a positive ROCE of 103.27% while its EBITDA margin also improved to 15.21% in FY22.

In October, Okinawa Autotech registered retail sales of 14,121 units from 8,494 units in September, as per Vahaan data. Okinawa was in the second spot while VC funded Ola Electric topped the chart with 16,129 units sold in the last month. Ampere, Hero Electric, and Ather Energy were in third, fourth, and fifth place respectively. Ather's operating revenue grew 411.9% to Rs 408.5 crore in FY22 from Rs 79.80 crore in FY21 while Ola Electric is yet to file its FY22 numbers. During FY21, the SoftBank-backed company incurred a loss of Rs 200 crore against operating revenue of Rs 86 lakh.

Okinawa’s strong show is a credit both to its vision and early start in a segment that has only come into its own in the past 2 years. Now, with legacy two-wheeler players also entering the segment in earnest, it is likely to face much more serious challenges ahead, where its experience so far should ideally hold it in good stead. What has not helped is recent reports about subsidies being held back pending investigations into its claims of local sourcing. While this might simply be an issue of interpretation,  it will also have to contend with battles on other fronts, be it marketing where vehicle safety linked to batteries is likely to be a key issue, or even financing for growth and expansion.

Revenues in FY23 are certain to exhibit moderate growth, largely due to a strong slowdown in sales the firm faced post April this year, right up to August. October saw a major revival in the month on month sales over September, but that, and the rest of the year may not be enough to make up for the drops seen earlier.

As per data compiled by Fintrackr, nearly 50 startups in the EV mobility space have raised funds worth around $800 million in 2022 so far. Earlier this year, Okinawa also said that it is planning to raise funds from private equities to double its manufacturing capacity.