Ather Energy betters Q4 results where Ola Electric falters

Economic Times

3 days ago

Agencies Ather 450S and the Ola S1 X+
The once industry leader, Ola Electric, reported a dismal March quarter, with a sizeable fall in its revenue and losses expanding twofold. In comparison, the recently listed Ather Energy posted a decent improvement in financials for the quarter.
For the quarter ended March, the Bhavish Aggarwal-led electric scooter maker reported a 62% decline in sales to Rs 611 crore, a precursor to the decline in market share two months later. The EV maker saw its loss double to Rs 870 crore, from Rs 416 crore in the year-ago period.
Ola Electric's financials were impacted by a one-time issue with the registration process, founder Bhavish Aggarwal on an earnings call. In February, Vahan data showed only 8,652 registrations for Ola Electric, while the company claimed sales of 25,000 units in its filings. The discrepancy was attributed to a temporary backlog caused by ongoing contract renegotiations with registration service providers Rosmerta and Shimnit India. The issues have been resolved in the current quarter, the CEO said.
Ather, the only other listed pure-play electric two-wheeler manufacturer, reported a 29% increase in operating revenue to Rs 676.1 crore, up from Rs 523.4 crore in the same period last year. Its losses narrowed 17% year-on-year (YoY) to Rs 234.4 crore on the back of rising volumes and improved margins.
Ola Electric had the lead in units sold during Q4 at 51,375 scooters, but Ather managed a close 47,411 units. While the former has started deliveries on its Roadster X motorcycles, Ather is working on developing its own line, funded by a part of its IPO proceeds.
"The performance of the Roadster X will be the key... While Ola Electric reports strong interest and positive feedback from early customers... we believe the electric motorcycle performance will be critical for the company, as it will be addressing two-thirds of the two-wheeler market through rural penetration; we will wait and watch the performance in the coming quarters," brokerage Kotak Institutional Equities said.
Ola Electric managed to reduce expenses by 31.6% to Rs 1,306 crore, largely due to a nearly Rs 1,000 crore cut in material costs. Ather, on the other hand, saw expenses rise 12.6% to Rs 922.2 crore from Rs 818.7 crore a year ago, mainly due to higher material costs, even as employee benefit expenses declined 29% to Rs 109.1 crore.The Ola S1 maker has guided for a better June quarter, though. 'If you look at our Q1 outlook, we are sharing a revenue forecast of about Rs 800-850 crore, about 65,000 deliveries and a gross margin of about 28–30%, which is much higher than Q4,' said Aggarwal in a post-earnings call.The company will be careful with allocating capital and managing risk, Aggarwal had said.
Also Read: Ola Electric to focus on capital discipline, risk management: CEO Bhavish Aggarwal after dismal Q4 earnings
Ather is targeting profitability, going forward. 'I think (there are) very strong levers for operating leverage in the coming quarters, which will hopefully get us to profitability soon. For us, profitability could happen at a lower scale than some of the other peers, given our more capital-light and more capital-efficient approach on business overall,' cofounder Tarun Mehta had said.