NEW DELHI: Ola Electric Mobility Ltd fell the most since early April after reporting quarterly losses that more than doubled from a year earlier.
Founder Bhavish Aggarwal said the performance was marred by operational delays, weak demand and rising competition.
The stock dropped as much as 9.7% Friday, the biggest intraday decline since April 7, and was trading down 5.3% as of 11:34 a.m. in Mumbai.
Net loss widened to 8.7 billion rupees ($102 million) in the quarter ended March 31, from 4.16 billion rupees a year earlier, the company said Thursday.
Revenue fell 62% year-on-year to 6.11 billion rupees.
The e-scooter maker in India has seen its shares slip more than 40% this year after a blockbuster listing in August amid multiple crises in recent months.
It has faced Indian government scrutiny for counting bookings for yet-to-be launched electric motorcycles and e-scooters as part of monthly sales and faced raids and vehicle seizures by state officials for lack of trade certificates at stores and alleged violation of customer rights.
Ola said it saw higher sales but lower revenue - yet sales are only recognized once a vehicle is delivered, which was disrupted during the quarter.
The company's decision to abruptly terminate ties with its registration vendors led to delays in vehicle registrations, directly impacting deliveries.
This, coupled with persistent product quality issues that have left service centers overcrowded with repairs, significantly weighed on profitability.
Aggarwal also acknowledged the intense competition Ola is facing from incumbents in India's e-two-wheeler market.
The company has been rapidly ceding ground to rivals such as Bajaj Auto Ltd. and TVS Motor Co., amid multiple regulatory hurdles and customer dissatisfaction.
"In the last quarter or two, we have lost market share as market penetration grew slower than we expected and competitive intensity increased significantly across all levers of distribution, product and pricing," he told analysts in a post-earnings conference call.
In a further blow, the launch of its flagship Roadster electric motorcycle - originally scheduled for January, then March, then May - will now occur in a "phased manner."
Skeptical Prospects
Analysts remain skeptical about the company's turnaround prospects, with Kotak Securities Ltd.'s Rishi Vora expecting operating profit losses to continue amid weakening brand equity and intensifying competition.
"Ola Electric's future hinges on scaling up volumes and successful motorcycle foray, which faces execution and credibility challenges," Vora wrote in a note Friday, while downgrading the stock to 'sell' from 'reduce,' and slashing its price target to 30 rupees from 50 rupees.
Aggarwal also disclosed a one-time warranty provision of 2.5 billion rupees during the quarter to cover expected costs from Gen 1 and Gen 2 scooters.
In a bid to boost sagging demand and support the stock, Ola announced a 48-hour flash sale on its S1X 3kWh scooter variant on Friday, slashing prices to 74,999 rupees and offering a 50% discount on its MoveOS+ software upgrade.
The company is also offering a free extended battery warranty as part of the promotion.
