Ola Electric (OLAELEC)
TurnaroundFairStock Score: 22/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹38.73 |
| Market Cap | ₹17,113.55 Cr |
| P/E Ratio | 0 |
| ROCE | -28.09% |
| ROE | -42.83% |
| Dividend Yield | 0% |
| Profit Growth | 13.65% |
| Debt/Equity | 0.82 |
| Sales Growth | -45% |
| Free Cash Flow | ₹-5,255 Cr |
| Promoter Holding | 34.59% |
| 52-Week Range | ₹22.25 — ₹61.02 |
| Sector | Automobiles |
| Book Value | ₹7.6 |
Strengths
- Quarterly sales of ₹470 Cr provide a base to restructure around
- Debt/equity of 0.69 is not yet at extreme levels
- Piotroski F-Score of 5/9 shows some financial health signals amid distress
- Book value of ₹11.66 offers a visible, though inadequate, floor below market price
Concerns
- Quarterly net loss of ₹487 Cr exceeds quarterly sales of ₹470 Cr
- Sales growth is -52.75%, indicating severe demand or business contraction
- ROE of -42.83% and ROCE of -28.09% are destroying shareholder capital
- Free cash flow of -₹5,255 Cr and Altman Z-Score of 0.87 point to serious financial stress
AI Analysis
Let me start with what I like. Ola Electric operates in a visible industry—electric two- and three-wheelers—and it has a revenue base of ₹470 Cr in the latest quarter. But my discipline is not about visibility; it is about durable economics. Last quarter sales were ₹470 Cr and net loss was ₹487 Cr. That is a business losing more than it sells. Sales growth is -52.75%, so the top line is collapsing, not compounding. I cannot earn a return from a company whose ROE is -42.83% and ROCE is -28.09%. Book value is ₹11.66, yet I am asked to pay ₹37.28—3.2 times book—for equity that is being eroded. Free cash flow is -₹5,255 Cr; that is a massive cash furnace. The Altman Z-Score of 0.87 sits deep in distress territory. Debt/equity of 0.69 may look tolerable, but with negative profits and negative cash flow, the debt burden will feel heavier. The reported profit growth of 13.65% is a mirage: it is still a ₹487 Cr quarterly loss. There is no dividend, no earnings support, and promoter holding at 34.59% gives me limited confidence in minority alignment. The Piotroski F-Score of 5/9 is mediocre. This is not a value investment; it is a high-risk turnaround speculation. Graham would say the margin of safety is absent. At best, I would wait for evidence of sales stabilisation, narrowing losses, positive free cash flow, and meaningful improvement in return on capital. Until then, fair valuation is unknowable, and the risk/reward is skewed against the shareholder.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer