Ola Electric Mobility Ltd. reported its quarter-one results on Wednesday, and while the overall losses of the company have expanded compared to last year, the more important story from these financials has to be the adjusted gross margin improvement, especially in the automotive business.
While consolidated revenues grew by 34% to Rs 1,718 crore, gross margins improved by 123% to Rs 377 crore. Adjusted gross margins as a percentage of revenue improved to 21.9% versus 13.2% year on year. These numbers are exceptionally strong, given that the company is only in its fourth year of operation.
Automotive Segment Drives Margins
This quarter also provided a glimpse into the automotive segment. The company reported segmental results for both its automotive and battery cell divisions and highlighted that the growth in gross margins on a consolidated basis is driven by better cost control in the automotive division.
As a result, the company’s Ebitda margins also improved drastically. Going forward as well, the company highlighted in its conference call the multiple levers at hand over the next couple of years to further improve this and get into a meaningful positive trajectory, which will be led by cost control, PLI benefits and most importantly, the cell division.
The company confirmed that it will commence the use of its electric battery cells starting in the first quarter of the financial year 2025–26. They already started production in March 2024 and, till date, have produced around 30,000 cells. They have also received BIS certification in May 2024 for these cells.
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