Ola Electric Q1 Results Highlight Weak Volumes, Cash Burn Concerns Ola Electric’s first-quarter financial results have intensified concerns among brokerages about the company’s ability to scale operations and manage cash flow. The electric two-wheeler maker reported a 45% year-on-year decline in revenue to Rs 455 crore, with continued EBITDA and net losses. Analysts from Kotak and Citi retained their "Sell" ratings, citing persistent weakness in sales volumes, declining average selling prices, and ongoing cash burn. Goldman Sachs maintained a "Neutral" stance but expressed caution over the company’s operational challenges. The Q1 performance underscored broader struggles in the electric vehicle sector. Ola’s average selling price dropped to Rs 1.14 lakh from Rs 1.31 lakh in the previous quarter, driven by a shift in product mix. Management expects ASPs to stabilize around Rs 1.30 lakh in the coming months. However, gross margins fell sequentially to 30.3%, a decline of 816 basis points, as commodity cost pressures are expected to keep margins constrained for at least one to two quarters. Free cash flow remained negative for the ninth consecutive quarter at Rs 350 crore, raising questions about the company’s financial sustainability. Kotak warned that sustained weak volumes could force Ola to seek additional capital, while Citi highlighted the uncertainty surrounding the transition to a dealership-led sales model. Despite cost-control measures and the reversal of a Rs 57 crore provision related to battery PLI targets, analysts argued these factors were insufficient to offset declining operational performance. Ola’s market share also declined to 6.9% in July, down from 8.3% in Q1 FY27 and 5% in Q4 FY26.#ola_electric #goldman_sachs #citi #kotak #mahashakti_project
