Ola Electric Mobility Ltd. expects to achieve Ebitda breakeven in the automotive segment in the first quarter of next fiscal. The company has successfully finished implementation of its ‘Network Transformation and Opex Reduction Program’, which was a company-wide initiative launched in November 2024, it said in an exchange filing.
This was launched with an aim to reduce cost and improve customer experience. According to the company, this initiative has delivered a sustainable cost reduction of Rs 90 crore per month.
If achieved this will be a huge signal to the market about the concerns raised on its profitability, after the company's Ebitda margin stood at negative 28% in the automotive segment in the third quarter of fiscal 2025.
Ebitda Breakeven Not Far-Fetched?
In its third quarter post earnings conference call, the management had said it would have to achieve monthly sales of 50,000 units per month to hit Ebitda breakeven. This is double what was sold in January 2025.
The company plans to reduce these costs by controlling service and warranty expenses, reducing headcounts along with network expansion. The service and warranty related expenses are expected to be reduced by Rs 32 crore per month, while headcount reduction will result in cost savings of Rs 29 crore per month, it said.
Cost Savings
Ola Electric mentioned that this program has encompassed distribution network transformation projects, like shutting all regional warehouses. This involves shipping vehicles, spare parts and accessories directly from the factory to its stores and thus automating registration and other processes.
As a result, this also led to productivity improvement in the sales and service network. These changes have resulted in reduced average vehicle inventory from approximately 35 to 20 days and as a result, reduced delivery time for customers from 12 days to 3-4 days.
Vehicle Registration Issue Resolved?
Last month, Ola had informed exchanges that its monthly VAHAN registration may have been impacted due to renegotiation of contracts with Rosmerta Digital Services Pvt. and Shimnit India Pvt., which carry out the vehicle registrations for India's largest electric two-wheeler maker.
This would not have a bearing on overall sales in the month, it had added.
Ola reported sales of 24,376 vehicles in January, a drop of 190% compared to the previous month.
Daily registrations increased to over 800 per day from roughly 180 units per day at the start of March.
Earlier this month, the company received a letter from IFCI Ltd. after it failed to start cell manufacturing at its Gigafactory on time. IFCI has been appointed as the Project Management Agency for the PLI ACC scheme.
The company is actively engaged with the relevant authorities in this regard and in the process of filing an appropriate response, it had said.
On the positive though, the company received Rs 73 crore as part of their Auto PLI Scheme for fiscal 2024.
Also Read: Kya Chal Raha Hai At Ola? Kuchh Bhi
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