How many 2W to be sold per month to achieve breakeven?
How much is the outstanding Debt? How much scooters to be sold to pay of the debt?
Whether that much Addressable market without competition there? Now add, with competition, how much TAM they can achieve?
Equity is not small portion (441 crores) + adjust for ESOP program + adjust for any other instrument. To make EPS of Rs 1, how much profit after tax needed.
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They will have EBIDTA breakeven at 25k per month. By my calculations, they will require to sell about 50k per month to achieve EPS of more than 1 rs.(This is a conservative estimate) Thereafter, it will be faster growth.
Currently, they sell 20k a month, after all the competition is here. Doing 50k a month won’t be much of an issue in next 5-6 quarters.
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So does this means that Ola is fully valued today for what they would be producing / earning after 1-2 years?
EPS 1 (when they produce 50K bikes), PE - 42 = Rs. 42 share price.
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A quick look at the balance sheet is enough to make one stay away from this company. With the current burn rate and remaining reserves it will be very diffcult to continue operations. We already have too many examples, latest being Gensol engineering: high debt, too many promises, founder being involved with many companies. Not saying Ola is going to close shop but it doesnt appeal for investment even with so much correction.
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That could be said about it at any price. In any case, I am betting on a 5-10 year period. As such, I would say it should do well even in 2 years, but nobody can actually be sure about it.
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I wouldn’t reply to this, but a comparison has been made with Gensol. As such, it had excellent balance sheet and looking at it today, one could actually be tempted to buy. But that is not where I invested. One must be very careful in making comparisons. 
As for money, I would say 4000 crore is enough to keep them running and expanding for 2 years and that is when I expect them to be profitable. Of course they will need about 2-3k crores more in the meanwhile to expand. I am sure they will find ways to get it.
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Good traction post Q1 update; revenue is better than consensus and losses narrowed QoQ. Stock might have bottomed out. I accumulated today!
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Ola may not be a good stock in near term. This quarter may again be less than Q1. Many things like store closures in MH(for example), service issues, logistics problems(not able to fulfill demand) etc will likely persist for near term. So, Q2 results might actually disappoint and give good opportunity to buy for those who have conviction.
They were EBIDTA positive in June 2025. I expect them to do well in Q3, where vehicle sales are more due to Navaratri and Deepawali.
I am bullish on their increasing efficiency. Cells and Bikes should do well in medium term. Long term, I was intrigued by their inclusion of perhaps a commute car. This is not mentioned in print but given only in a picture. Passenger and Cargo 3 wheelers were there in past letters, but “QUAD” is new. This will however need much more complexity and engineering capacity, not to speak of financial capacity. I hope they put money there after they have solved 2W and achieved a consistent 20-25% markets over next 3-4 quarters.
The product portfolio is expanding and will definitely help them. For those interested, reading the Quarterly shareholders’ letter would be very instructive. This time, they are being very cautious and giving targets that at least I see as achievable. So, a steady growth over 2-3 years will position them for a rapid growth after that. It seems the management has learnt some lessons. Looking forward to the earnings call for more clarity on logistical issues, including service and demand fulfillment. These are the two biggest issues I see in Ola on social media.
Edit : Please do remember I am invested and am positively biased.
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It’s strange that no one asked question about the probable closure of the stores in the concall. 12% in sales lost although doesn’t seems much it can percolate into the bottomline much more intensely.
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Just assumption or my guesswork:
Sometime we underestimate the leverage these companies have on state government. Only In the very extreme situations state governments take such a step otherwise they would just let it go with a warning and/or penalty. It’s not in their (government) to shut down the stores as these companies are also a significant employment generator.
This news sounds like an explicit warning to me than a action take by the state government.
I wouldn’t read too much into such news and for that matter any news delivered by anchors. If you are getting such a feedback from say 5 different state governments then we must act.
Disc. Recently started accumulating
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This more than anything else shows lack of basic execution abilities. Is there no legal dept in this organization. It is relatively simple to get trade certifications either at municipal and state levels for large orgs.
One-off exemptions where store is opened before certificate is received will be let off with a fine as long as application is made to concerned dept.
1 Like
First things first: I’ve recently added to my portfolio, so I’m likely biased.
Although it’s a tactical call only to begin & still just 1% allocation, can sell anytime.
Now, with that out of the way, why does Ola, despite all its troubles, look interesting
Sharing a few media articles/ links
https://x.com/Tijori1/status/1944658801568927880
Now, there are also going to be a lot of articles/ reports that don’t view Ola favourably.
Not going into the business, as a lot of the moving parts are changing dynamically. There was a lot of focus last year on the service issues & before that, even on product viability wrt fire accidents, & now it seems like Maharashtra permits & compliances.
I would focus a lot more on the pace of EV adaptation and how the whole industry is moving forward. Is the EV 2W story likely to be incrementally positive & should one look at Ola to play the theme?
The stock has done quite badly over the year. Despite the surge yesterday, the stock @ 45 is still quite close to the 52-week low, or Ola @ 20k Cr Mkt Cap are languishing, so there is healthy scepticism priced in.
And even the thread here broadly reflects the street mood amongst the informed investors as well.
To me, it’s a question of does the present day represents a ‘Heads I win, Tails I don’t lose much’ situation? Are the Risk-Return odds favourable?
How is EV policy likely to be, going forward?
Can Bhavish & co turn the tide on Ola’s fortunes?
& would one like to take a bet or not, surely differs from individual to individual
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The Ken weighs in on Ola’s rising interest costs which have doubled from last year and credit downgrade
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I wouldn’t give much weight or credibility to what The Ken says. Over the years, they seem to have diluted their credibility.
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They make good points and I generally enjoy reading The Ken. Similarly, Morning Context too has negative views on Ola.
It is only when others have negative views do you find shares at good prices. Now coming to the actual issue:
The debt which has to be serviced. They themselves say that there is plan to raise 1700 crore debt. That is well known. It should be enough to tide them over. Let us say it is not. My guess is that the use of 2800 crore would be changed. I say this because they have now changed targets of expansion. For example: battery capacity would now be at 5GW for the time being, which earlier was supposed to be 20GW.
So, they can take permission of shareholders and according to SEBI regulations, use that for OPEX too. My sense is that it would have to be done at some point.
So, the basis of The Ken’s video( that 2800 crore is locked away) is not accurate.
Secondly, the business will now stabilise for a few quarters. The targets of 325-375k for the year with revenue targets of 4200-4700 crores are quite doable. With margin expansion, the cash will start coming in by next FY. Remember it is still a 3-4 year old company. Things are changing fast and in my opinion for the good.
There should be a lot of opportunities to buy as results will be not according to what media expects. Although, for those who follow closely, there would be only a few surprises.
Ola will likely disappoint both the optimists and th pessimists. I think it will survive, but not thrive as early as many of us would like it to. This is not a counter where you can make quick money. But in long term, current valuations would make sense.
11 Likes
Short story:
The day Ola electric IPO was launched, I didn’t buy from the public market, instead choose to sit on sidelines as the IPOs of new age companies are more often than not insanely priced and the valuation corrects itself in some time.
I put an price alert at INR 40 and forgot about it. I was fairly certain that Ola won’t see that price. Incredibly, it did and I was notified. Since then I am trying to understand what really went wrong, is the price justified or it’s just a panic due to a buildup negative sentiment.
I do not have answers to this but what I can see quite clearly is that Ola is shaking the very roots of Indian 2W market. The market that has been ruled by a few automakers who never ever let any new player to thrive are facing competition, a very tough one. The incumbent players who have always been either collaborated with international 2W brands to come up with good designs and looks or produced same old designs in the past are now struggling to keep up the pace with changing market dynamics. Incumbents players who have been seen in the past not acknowledging the pace and possibility of Indian 2W electrification are now taking out their dusted drawing boards.
I do not know and i believe nobody knows who will win this battle. However, I have heard that first mover in the market always has an edge. Nowadays, Ola represents the entire category of EV 2W, and has become proprietary eponym. Nobody has the range of products that Ola has introduced, the interconnectedness it offers, software-hardware integration, features, etc.
ICE vs OLA Roadster comparison
| Bike | Price | Power and Torque | Top Speed |
|---|---|---|---|
| OLA Roadster Pro (16kwh) | 2.7lacs on road | Power- 52kW, Torque - 105Nm | 196kmph |
| TVS Apache RTR 310 | 2.8 - 3 lacs on road | Power- 35kW, Torque - 28Nm | 150kmph |
| Triumph Speed 400 | 3 lacs on road | Power- 40kW, Torque - 37Nm | 150kmph |
| Bajaj Dominar 400 | 2.8 lacs on road | Power- 40kW, Torque - 37Nm | 155kmph |
| KTM 390 Duke | 3.5 lacs on road | Power- 45kW, Torque - 39Nm | 167kmph |
| Yamaha MT-03 | 4.16 lacs on road | Power- 41kW, Torque - 29Nm | 170kmph |
Edit 1: Comparison is made to show that EV 2Ws have reached the price parity with ICE, this was one of the main concerns. Notably, In Ola’s case EV 2Ws are even better priced if you compare the specs.
It’s not difficult to understand; how Ola could eat up the entire mid to upscale bike market share of all the incumbent players if they do not move fast enough. You might see a lot of mergers and acquisitions of small EV players by the incumbents in the coming months or quarters. Even then it would be difficult if not impossible for the incumbents to match the gross margins of Ola, credit to the robust backward integration done by Ola.
Some questions that came to my mind,
how the heck Ola did it?
It’s not from one day to another. Ola has been working on their cell technology since 2020, on futuristic bike/scooter models since 2018 or so. When the incumbents were sleeping, Ola was doing R&D. Designing a bike is not a walk in the park. Bike designs haven’t been changed for decades, everyone is using same old ‘ghisa peeta design’. Ola along with some other prominent players such as ‘Ultraviolette’ have been making very prominent designs. It will take some 2-3 years for incumbents to come up with a differentiated design, of-course they could also retrofit their old bike designs as well.
How Ola is coming up with such amazing designs?
They have one of the best automotive designer.
Refer: Kripa Ananthan Kripa Ananthan - Ola Electric | LinkedIn
She has masters in design from IIT Bombay. 0.02% chance for getting an admission. Refer the LinkedIn link to know more about her. Bhavesh has hired the best.
How Ola is coming up with state of the art battery plan?
They have, again, hired the best engineers/researchers.
Refer: RAJESH MEKKAT (R&D Head, Ola cell technologies ) - https://www.linkedin.com/in/rajesh-mekkat-09a28316/
Just check his profile, you will feel confident about their plans.
I think it is just one of the, let’s say challenging phase of their long journey, this too shall pass. Service quality and product quality have been improving steadily, I think even they were amazed to see the customer adoption and were not able to adapt their service and logistic infrastructure accordingly. I will take a pause here.
disc:
Invested and biased
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What to say about loosing it’s market share to already existing and well established senior players like Bajaj and tvs. Ola is now moved to no. 3 in terms of sale. Please remember all senior players have deep pocket. Recent social media quarrel with comedian and the way Bhavesh replied to whole scenario proves , he is not humble and ground to earth person. Such arrogance is keeping me away from Ola. Will love to hear your counter views sir.
Not holding.
2 Likes
When you compare ICE with EV you lose the core perspective. Electric bikes from ola will compete with electric bikes from legacy players. The ola scooters are not losing to activa but bajaj chetak. Legacy players can and will come with their own EV bikes. What will happen then is the most interesting question to my mind.
Disc: not invested
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Some corrections to data–
Bajaj Dominor is prices around 2.17 L
Triumph is around 2.6 L
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