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(Bloomberg) — Ola Electric Mobility Ltd.’s shares were headed for the biggest drop in two months, after the Indian electric-scooter maker slashed its full year sales and revenue targets, warning of weaker demand in the remainder of the fiscal year.
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The Bengaluru-based company’s stock fell as much as 5% on Thursday, the most since Sept. 5, after it pared second-half sales expectations to about 100,000 vehicles, bringing its full-year estimate to roughly 221,000 units — more than 40% below its earlier projection of 325,000–375,000, according to a letter to shareholders.
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Revenue for the full-year ending March 31 is now guided at 30 billion to 32 billion rupees ($360 million-$385 million), down from a prior forecast of 42 billion to 47 billion rupees issued in the first quarter.
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The downgrade — following the company’s fifth straight quarterly loss since listing in 2024 — reflects what Ola called a “disciplined approach” amid intensifying competition in India’s electric two-wheeler market. Led by Bhavish Aggarwal, Ola has been losing market share to local rivals and is betting that growth in its energy storage business will cushion the slowdown in vehicle sales.
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Ola Electric’s two-wheeler sales nearly halved to 52,666 units in the second quarter from a year earlier, in what founder and Chief Executive Officer Aggarwal called a “flat market.” The company has also lost its position as India’s top-selling electric-two-wheeler maker in recent months to rivals Bajaj Auto Ltd. and TVS Motor Co., while listed peer Ather Energy has been rapidly gaining market share.
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On an analysts call following the results, Aggarwal said Ola Electric is prioritizing profitable growth and “doesn’t mind” losing market share to rivals that are “buying” sales through discounting. He, however, noted that Ola’s products were priced competitively or even lower than that of competition.
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Despite the weaker volume outlook, Ola reported its first-ever positive earnings before interest, taxes, depreciation and amortization — a measure of operating profit — in the July-September quarter. The company said operating profitability stood at 0.3%, while gross margin improved to 30.7%, up 510 basis points from the previous three months.
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Ola is now changing tack to focus on its energy business, which will contribute to arrest moderating automotive revenues toward the end of this fiscal year, Aggarwal said.
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The company’s home battery system built on its in-house 4680 cells will yield 1 billion rupees in revenue from the fourth quarter, he said.
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