Target: ₹159
CMP: ₹125.76
Ola Electric Mobility reported revenue from operations for Q1-FY25 at ₹1,644 corer, up 32.3 per cent y-o-y and 2.9 per cent q-o-q. EBITDA loss for the quarter stood at ₹205 crore, an improvement of 6.3 per cent y-o-y and 52.1 per cent q-o-q. EBITDA Margins stood at -12.5 per cent, an improvement of 500 bps y-o-y and 700 bps q-o-q.
Loss for the quarter widened to ₹347 crore, a 23.06 per cent fall y-o-y, while it improved by 19.88 per cent q-o-q. Ola has managed to capture nearly 49 per cent of the electric two-wheeler market in India and has witnessed growth in gross margins on account of introduction of the Gen 2 platform, which led to reduced manufacturing costs.
The company also undertook cost reduction initiatives by utilizing AI and digitization to lower their distribution costs, which led to a 12 per cent reduction in other expenses, on a sequential basis.
We recommend a ‘Buy’ rating for Ola Electric Mobility, targeting a price of ₹159, reflecting a P/S ratio of 4x (FY27E basis).
We believe that Ola’s dominant market share in the e2W market, growing e2W penetration in the country coupled with the launch of new electric motorcycle portfolio, will position it as a dominant competitor in the EV space in the near term.