SUMMARY
- Ola Electric is projected to achieve EBITDA breakeven by FY27, with revenue growing at 40% CAGR from FY24 to FY30.
- The company is expected to reduce its losses and see significant market share growth.
- Intense competition is anticipated with Ola’s upcoming launches and competitors like Ather Energy expanding their offerings.
Bengaluru-based electric vehicle (EV) manufacturer Ola Electric is projected to achieve EBITDA breakeven by the fiscal year ending March 2027, according to a recent report by Goldman Sachs. The company, known for its rapid growth in the EV space, is expected to significantly increase its revenue and vehicle volumes over the next few years.
Key Financial Projections:
Revenue Growth: Ola Electric’s revenue is expected to grow at a rate of 40% CAGR from FY24 to FY30, with a fivefold increase in vehicle volume.
EBITDA & ROIC: The company is expected to reach 11.9% EBITDA margin and 27% ROIC by FY30, in contrast to its current negative figures of -19.7% EBITDA margin and -32% ROIC in FY24.
Free Cash Flow (FCF): Ola Electric is projected to achieve FCF breakeven (excluding subsidies) by FY30.
In Q1 FY25, Ola Electric’s revenue from operations grew modestly by 2.8%, reaching ₹1,644 crore, up from ₹1,598 crore in the previous quarter. Despite this slow growth, the company managed to reduce its losses by 16.6%, reporting a loss of ₹347 crore. For FY24, Ola Electric recorded a revenue of ₹5,010 crore and a loss of ₹1,584 crore.
Goldman Sachs has issued a “buy” rating for Ola Electric, with a 12-month target price of ₹160 per share, suggesting a potential 50% upside from its current trading price of ₹113 per share. The brokerage firm expects Ola Electric’s revenue to grow at a faster pace than its competitors, such as TVS Motor, Bajaj Auto, and Hero MotoCorp, which are projected to grow at 16%, 19%, and 10%, respectively.
Ola Electric’s market share surged from 21% in FY23 to 49% in Q1 FY25, but has recently dropped to 32% in August. In comparison, TVS and Bajaj each held a 19% market share, while Ather Energy had a 12% share in the same period.
The EV sector is poised to see increased competition as Ola Electric plans to launch its motorcycle and electric three-wheeler (e-rickshaw) in the coming months. Ather Energy is also ramping up efforts with plans to begin manufacturing motorcycles and gearing up for a public listing.
