Ola Consumer (previously ANI Technologies) has demonstrated notable financial improvements in FY24 as it prepares for its initial public offering. Although the company’s net loss decreased by 57.46% to ₹328.5 Cr, its operating revenue also decreased by 5.48%, indicating difficulties in the ride-hailing sector. Ola has been aggressively reducing expenses and reorganizing its business processes in response to the growing competition from Rapido and BluSmart. Can it maintain this momentum before going public, though? Let’s examine it more closely.
Credits: The Economic Times
A Sharp Decline in Losses, But at What Cost?
The FY24 financials of Ola Consumer show a strategic move in the direction of cost efficiency. The company’s net loss improved significantly from ₹772.2 Cr in FY23 to ₹328.5 Cr in FY24. However, significant cost-cutting, particularly in employee benefit spending, which decreased by 42.3% to ₹333.8 Cr, was substantially responsible for this.
Between January 2023 and April 2024, Ola laid off over 400 workers in its financial services, electric mobility, and ride-hailing businesses. Costs were greatly reduced, but long-term sustainability and creativity were also called into question.
Revenue Dips Amid Growing Competition
Ola Consumer’s operating revenue dropped by 5.48% from ₹2,128.5 Cr in FY23 to ₹2,011.9 Cr in FY24, even as its losses decreased. The company’s “sale of services” division, which comprises ride-hailing and other services, generated almost 92% of its total income.
This drop coincides with Rapido and BluSmart’s ongoing market expansion. While BluSmart’s emphasis on high-end EV-based ride-hailing has drawn eco-aware clients, Rapido’s bike taxi concept has grown in popularity in Tier 2 and Tier 3 cities. Regaining market share while getting ready for a public listing is now Ola’s problem.
EBITDA Sees Major Improvement
EBITDA (excluding discontinued operations) improved to ₹271 Cr from ₹87 Cr in FY23, which was one of Ola Consumer’s greatest gains in FY24. Additionally, the company’s EBITDA loss dropped dramatically from ₹371 Cr to ₹34.3 Cr in the preceding fiscal year.
More significantly, Ola’s EBITDA margin increased from -17% in FY23 to -2% in FY24, indicating that the company is moving toward operational profitability. The company’s ability to keep up this pace will be essential as it seeks to draw in investors for its initial public offering.
Where Did Ola Consumer Spend?
Ola Consumer’s total expenditure declined by 16.3%, from ₹2,516.7 Cr in FY23 to ₹2,106.7 Cr in FY24. Let’s break down its key spending areas:
1. Employee Benefit Expenses
- Dropped 42.3% from ₹578.3 Cr in FY23 to ₹333.8 Cr in FY24.
- Major layoffs were conducted across multiple business units.
- Helped Ola cut costs but raised concerns over long-term innovation.
2. Marketing & Advertising
- Increased by 163.55%, from ₹40.6 Cr in FY23 to ₹107.6 Cr in FY24.
- Indicates Ola’s attempt to regain lost market share and boost consumer engagement.
3. Commissions Paid to Selling Agents
- Ola spent ₹74.7 Cr under this category, compared to ₹0 Cr in FY23.
- This likely relates to its vehicle financing and insurance business under Ola Financial Services.
Strategic Moves & Future Plans
As Ola Consumer prepares for its IPO, the company is exploring new revenue streams to stay competitive. Last year, CEO Bhavish Aggarwal hinted at major expansions, including:
- Ola Coin – a potential rewards and payments ecosystem.
- UPI & fintech expansion – strengthening Ola’s position in digital payments.
- Dark stores & fulfillment centers – signaling an entry into quick commerce.
- 10-minute food & grocery delivery pilot in Bengaluru – leveraging ONDC for food delivery.
Additionally, the company discontinued its electric scooter sales and services business before Ola Electric’s IPO in August 2024, consolidating its focus on ride-hailing and new-age services.
Credits: Inc42
Final Thoughts: Can Ola Consumer Pull Off a Successful IPO?
Ola Consumer’s financial restructuring and cost-cutting efforts have certainly improved its profitability metrics, but the declining revenue and increasing competition remain key challenges. While its IPO plans signal confidence, investors will closely watch its ability to sustain growth while competing with aggressive rivals like Rapido and BluSmart.
With an expanding portfolio of services, a leaner cost structure, and renewed focus on profitability, Ola Consumer is making strategic moves. But whether these will be enough to convince public investors remains the biggest question.
As the company inches closer to its IPO, the next few quarters will be crucial in determining whether Ola Consumer can truly turn its ride-hailing dominance into a long-term success story.
