Shares of Ola Electric Mobility jumped as much as 11 percent to Rs 49 per share on August 20 as around 0.3 percent equity of the company changed hands through ten block deals. The stock has now gained in four out of the last five trading sessions.
In the past one week, shares of Ola Electric have surged by 20 percent, compared to a one percent rise in the benchmark Nifty 50 index.
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Earlier this week, the stock gained further attention after founder and chairman Bhavish Aggarwal laid out an ambitious growth strategy at the company’s annual Sankalp event.
The company is aiming for a 25 to 30 percent share of India’s two-wheeler electric vehicle market, backed by vertical integration and new product launches. “Our target market share for two-wheeler EVs is about 25 to 30 percent with very high margins, so we believe we are on the trajectory again,” Aggarwal said. He added that Ola’s “mojo is still there” despite the challenges faced during its transition phase.
Over the past 6 months, Ola Electric phased out its Gen 2 scooters, increased supplies of its Gen 3 models, and rolled out its first electric bike. “It’s been two quarters of transition. Along with product transition, we’ve had a distribution scale-up. You’ll now see, leading into the festive season, the market share volumes starting to inch upwards,” Aggarwal noted.
He also stressed that profitability in electric vehicles requires more than just scale. “No one is making money. To make money with EVs, you need vertical integration, you need the technology development, you need the DNA of technology,” Aggarwal said.
On the earnings side, Ola Electric reported a weak first quarter compared with the same period last year, though results were better when compared sequentially. Losses narrowed and revenue improved quarter-on-quarter.
The company’s gross margin improved by 1,100 basis points sequentially and by 740 basis points compared to last year. Gross margins stood at 26 percent at the end of the June quarter, while the management expects the full-year gross margin to be in the range of 35 to 40 percent.
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