Ola Electric Mobility Shares: The shares of Ola Electric Mobility Limited surprised everyone in the stock market on 14 July today. The company’s shares led to a stormy boom of up to 20 % after the announcement of the June quarter results. This boom was surprising because it has made a net loss of Rs 428 crore in the June quarter. Despite so much losses, Ola Electric shares climbed 19.75% to close at Rs 47.66 at the end of the trading today. This boom was seen not only in the share price, but also in its trading volume. Ola Electric’s more than 58 crore shares were traded today, while its average volume of the last 20 days has been only 3.2 crore shares. This is the most trading volume ever after the company’s listing.
Results of Ola Electric
The company’s net deficit reached around Rs 428 crore in the June quarter, which was Rs 347 crore in the quarter last year. At the same time, the company fell by 49.6 percent on an annual basis and it was reduced to Rs 828 crore. The company’s revenue was Rs 1,644 crore in the same quarter last year.
Now let’s know the five major reasons, due to which the shares of Ola Electric made such a great jump:
1. Improvement in results on quarterly basis
The June quarter results by Ola Electric saw an increase in net deficit on an annual basis, but on the quarter basis i.e. there was a decrease in losses compared to the March quarter. Ola Electric had a loss of Rs 870 crore in the March quarter, which was now reduced to Rs 428 crore in the June quarter. The company’s revenue also saw an increase in the March quarter against Rs 611 crore and it has increased to Rs 828 crore. In addition, the number of sales has also improved.
2. Gros margin bounce and expect further improvement
The gross margin of Ola Electric i.e. GDP has seen a good improvement during the June quarter. The management has indicated that in the coming time, it can improve and up to 1,500 basis points i.e. about 15 per cent. In this, the government’s production linked incentive (PLI) scheme will also play a role, which will reduce the cost and increase the profit.
3. Ebitda positive in auto segment
The company’s automobile segment gave the demonstration in this quarter that was promised. This segment has now become positive on the front of the operating profit i.e. on the basis of Ebitda. Management says that cash generation may start soon from this segment.
4. EBITDA margin estimate for the whole year
Ebitda margin of Ola Electric was -11.6% in the June quarter. But now the company hopes that the entire year’s Ebitda margin can increase to 5%. This was the most relief for investors, which makes the company look likely to move towards profit.
5. Attractive valuations after a huge fall from IPO price and high
The shares of Ola Electric touched the highest level of Rs 157 after the listing, but after that it fell drastically. Before trading started on Monday, the stock was trading down by about 48% below its Rs 76 IPO price and 75% fall from its listing high. In such a situation, investors on low valuation saw it as a purchase opportunity and intensified the bye.
Overall, the company has indicated that it is moving on the path of profits from deficit. But it will have to be seen how the company’s performance is in the quarters.
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