Ola Electric records Rs 373 Cr revenue in FY22; losses jump 4X

Ahead of the launch of an initial public offering, Ola Electric has finally published its annual financial results for the fiscal year ending March 2022 or FY22. The Bhavish Aggarwal-led company was in a pre-revenue phase during FY21.

Ola Electric has posted Rs 373 crore in operating revenue during FY22 as compared to Rs 0.86 crore in FY21, according to its annual financial statements filed with the Registrar of Companies.

The EV startup started deliveries of its electric scooters in December 2021 and before that, it had been operating as an infrastructure provider for the charging and battery swapping network in India.

The sale of scooters formed 93.3% of the collections and registered Rs 348 crore in revenues during FY22. While the rest of the operating revenue came from the sale of services which includes battery swapping and subscription services which registered at Rs 25 crore in the financial year ending March 2022.

Being a scooter manufacturer, the cost of procurement of products accounted for 50.4% of the total expenditure. This cost registered at Rs 625 crore in FY22. Its employee benefit costs surged 43.1% to Rs 282 crore during FY22. This includes Rs 19.5 crore as ESOP cost which is non-cash in nature.

Ola Electric’s advertisement spending and legal professional fees increased 206% and 57% respectively to Rs 49 crore and Rs 44 crore during FY22. The company added another Rs 37 crore towards IT costs which steered its overall expenditure 4X to Rs 1,240 crore in FY22.

Manufacturing expenses and additional overhead costs resulted in a fourfold rise in losses, reaching Rs 784 crore in the fiscal year 2022. Its ROCE and EBITDA margin registered at -18% and -157% in FY22. Ola Electric spent Rs 3.32 to earn a unit of operating revenue.

Ola Electric is yet to file its audited financial report for FY23. A Reuters report recently said that the company recorded $136 million (Rs 1,100 crore) loss in FY23 with a revenue of $335 million (Rs 2,700 crore). It’s worth highlighting that the firm had its sights on a target of $1 billion (Rs 8,000 crore).

Ola Electric currently leads the market for electric 2 Wheelers in India and stood on top in August with 18,333 units sold. The company registered a massive YoY sales growth of 375% in July 2023 as compared to July 2022. It was followed by TVS, Ather Energy, Bajaj and Okinawa which sold 9,599, 6,198, 3,912 and 2,138 units in July respectively.

Valued at over $5 billion, Ola Electric has raised around $800-900 million in funding to date and as per a Mint report, the company is eyeing another $350 million led by existing investor Temasek.

With most of his wealth in Ola tied up in Ola Electric now, it is safe to say that Aggarwal will not hope to see as long a wait for breakeven, unlike Ola cabs(see our story on Ola cabs ). Even though he has announced plans to get into more segments like 4 wheelers, which will only delay the path to profitability.  But to give him credit, lightning fast (by auto standards) go to market on Ola Electric has enabled it to take pole position in the tough 2 Wheeler segment, that it should retain for some time into the near future.

The market has been rocked in the past quarter by controversy around FAME subsidies, which manufacturers are hoping they can put behind them soon. That will certainly help Ola Electric, as it pockets the largest share of those subsidies among 2 wheeler firms.  What will help even more is an extended period without any incident with the scooters, which has been a major worry for all manufacturers in their efforts to build a reputation as a safe and reliable elride.