Companies

Ola drives into profitability

Yatti Soni Bengaluru | Updated on November 03, 2021

Mobility unicorn posts EBITDA of ₹90 crore in FY21

Mobility unicorn Ola has reported a positive EBITDA of ₹89.82 crore (on a standalone basis) for the financial year that ended in March 2021.

In filings with regulatory authorities, the company also reported a profit before tax of ₹76.29 crore in FY 2021 on a standalone basis, an improvement of more than 2x on a year-on-year basis. This in spite of the fact that the company has earned a total revenue of ₹772.68 crore as compared to last year’s income of ₹2,073.02 crore. The severe drop in revenue was attributed to the Covid-19 pandemic and the nationwide lockdown imposed by the government.

Reduction in direct cost

The company also reported a reduction in direct cost on ride bookings. The direct cost was brought down to 2 per cent of company’s GMV in March 2021 as compared to 2.6 per cent in February 2020. These reductions have been achieved by the company by offering better customer and driver experience, and adapting variable cost constructs for many cost elements. Indirect cost per booking is also reported as reduced from ₹11.5 in February 2020 to ₹9.8 in March 2021.

In August, Ola’s CEO Bhavish Agarwal tweeted that the company will solve many issues around payments, cancellations etc for drivers, customers. “1-2 months will see significant improvement. Totally focussed on making Ola the most convenient platform for all, especially our driver-partners,” Agarwal said at that time.

New users

Currently, the company claims to be adding 1.1 million new users in India mobility every month organically (without any marketing money being spent). Further, the number of transacting driver partners with Ola in August 2021 were reported as 4.88 lakh as compared to 6.24 lakh in February 2020 and 3.45 lakh in August 2020.

Also, the monthly transacting users have jumped from 4.5 million in August 2020 to 11 million in August 2021. The company has updated its rider application to book a ride in 30-40 per cent lower time to book a cab than the previous version. Further, the process of booking a cab is said to have been simplified by displaying all prices and categories upfront, making it easier for customers. The company has rolled out the new app for 100 percent customers in international markets and a controlled 5 per cent roll out across India, showing healthy metrics and 80 per cent in Hyderabad to optimize the pricing algorithms.

IPO plan

Ola is looking to go public by next year and is estimated to be looking to raise around $1-2 billion from the IPO. The company is expected to file its DRHP (Draft Red Herring Prospectus) soon, after the board reaches a consensus on the route of listing. BusinessLine had earlier reported in September that the company’s board is divided between no-promoter and promoter route of listing.

In October, Ola’s chief financial officer Swayam Saurabh and COO Gaurav Porwal have quit the company, as the company undergoes internal restructuring.

Earlier in July, Temasek, Warburg Pincus and co-founder Bhavish Aggarwal had invested $500 million in Ola.

The company has a clutch of marquee investors on its board including SoftBank, Steadview Capital, Tiger Global Management, Matrix Partners, among others.

Published on November 03, 2021

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