Ola Electric Shares Plunge 72% from Peak on Weak Earnings and Block Deals

Ola Electric shares have suffered a sharp fall, losing close to three-quarters of their value after hitting a record high of ₹157.40 on August 20, 2024—just days from its impressive listing on the National Stock Exchange (NSE) at ₹75 per share.

Since that high point, the stock of the company has been in uncontrolled free fall with no reversal in sight. On Tuesday, it fell to a new low of ₹43.16 on the NSE, down 72% from its all-time high.

The recent fall followed huge block deals throughout the day, amounting to about 0.8% of the company's entire equity. These transactions caused worry regarding investor confidence and the outlook going ahead.

This is not the first time Ola Electric has witnessed such a movement. A blockbuster block deal in the early part of June resulted in 14.22 crore shares—approximately 3.23% of the company's equity—being traded for ₹731 crore. In that deal, the average price per share was ₹51.40. Sources have suggested that Hyundai Motor Company was the one selling in that specific deal.

The falling share price also reflects the disappointing financial performance of the company in the fourth quarter of FY25. Ola Electric had a net loss of ₹870 crore in the March quarter, more than twice the ₹416 crore loss in the same quarter of the last fiscal year.

Operations revenue fell 62% from last year to ₹611 crore, led by a steep fall in deliveries of vehicles. The company sold 51,375 units in Q4 FY25 compared to 1.15 lakh units in Q4 FY24.

Complementing the firm's woes, the auto segment experienced a sharp decline in profitability. The segment's EBITDA margin declined to -78.6%, down from -9.3% in the prior corresponding period a year ago. Consolidated EBITDA margin declined further to -101.4%, driven by higher provisioning and poor operating efficiency.

While the dismal quarterly figures, the only small silver lining was that Ola Electric was able to enhance its gross margin, which improved to 19.2%.

For the entire fiscal FY25, the company delivered 3.59 lakh units, up a small margin from 3.29 lakh units in FY24. It posted adjusted revenue of ₹4,665 crore for the year, and the consolidated EBITDA margin was at a worrying -34.6%.