Ola reports first-ever operating profit of Rs 90 cr in FY21

Ola has reported its first operating profit of Rs 89.82 crore for 2020-21, even as the ride-hailing company's revenue declined 65 per cent to Rs 689.61 crore amid COVID-19 induced lockdowns.

As per regulatory documents filed by ANI Technologies - the parent company of Ola - it had logged standalone operating profit (profit before finance cost, depreciation, amortisation and tax (EBITDA)) of Rs 89.82 crore in FY21 on a standalone basis, while it had registered a loss of Rs 610.18 crore in the preceding fiscal year.

"ANI standalone (mobility business) operating profit in the black with positive EBITDA at Rs 8,982 lakh, improvement of 109 per cent on a year-on-year basis...ANI standalone (mobility business) reported profit before tax (before exceptional items) of Rs 7,629 lakh, wiping out its losses with an improvement of more than 2x on a y-o-y basis," the regulatory documents stated.

The total loss for the period stood at Rs 1,326.08 crore in FY21 on standalone basis, lower than loss of Rs 1,714.62 crore registered in FY20.

Ride hailing business accounted for a majority share of the consolidated revenue for the IPO-bound company.

ANI Technologies, which also has food delivery and financial services offerings, saw its operational loss narrowing to Rs 429.20 crore in FY21, while revenue declined 63 per cent to Rs 983.15 crore on a consolidated basis.

When contacted, an Ola spokesperson said the company has been focused towards building a business with strong operational efficiencies and improved unit economics "...and our results today reflect just that.

"This will be significant as we continue to build the New Mobility ecosystem for a billion people in India."

Like many other sectors, ride-hailing businesses were also adversely impacted by the COVID-19 pandemic that confined people within their homes.

With offices shut and minimal people like frontline workers being allowed to travel, cab aggregators saw their revenues declining sharply last year.

In September, Ola co-founder Bhavish Aggarwal had said the company's GMV (gross merchandise value) had crossed pre-COVID levels, and the recovery from the second wave had been three times faster compared to that after the first wave.

He had also noted that Ola had added 10 million new users in 2020-21, and that the company is working on onboarding more driver-partners, entering new cities, and building new products to better serve mobility needs post-COVID.

In May last year, Ola had laid off 1,400 staff from its rides, financial services and food business as revenues declined 95 per cent in the preceding two months due to coronavirus pandemic.

In its filing, Ola said the company stepped into the new financial year amidst a nationwide lockdown to curb the spread of COVID-19.

"The business dropped to zero during April 2020 with strict national lockdown.

"With non-emergency travel restricted, the company placed itself as a partner for emergency services, helping governments to manage the pandemic and those who were in need of medical assistance," it added.

Ola said through Pisces eServices Pvt Ltd (a wholly-owned subsidiary of the company), it has made significant progress in the food business in both distribution and enhancing the product portfolio.

"Pisces has a wide distribution through 40 active delivery kitchens in major cities, which continued to be functional during the COVID-19 crisis.

"Pisces has built a comprehensive portfolio of both curated and popular cuisines to achieve both scale and coverage in the food segment," it added.

During the year, Ola Financial Services Pvt Ltd (a subsidiary of the company) had a turbulent year with the impact of external factors on the lending environment in general and the double impact on mobility business and its spillover to the Olamoney brand.

"OFS (Ola Financial Services) successfully managed to control its risk and limit its exposure to the worsening credit environment by taking proactive steps to reduce risk.

"OFS launched a slew of new products and capabilities in both the lending and insurance businesses and further deepened its partnerships with the leading merchants in the ecosystem," it said.

The filing noted that OFS will be expanding the insurance business internationally to support the operations of the mobility business through innovative insurance products designed for the UK and Asutralia-New Zealand markets.

OFS will be launching new capabilities to the "pay later" instrument to make it more appealing to the target audience, it added.

"OFS is expanding its suite of products by launching new lending products in the form of two-wheeler loans, four-wheeler loans and personal loans to offer a comprehensive financial product ecosystem to the customer.

"Through these growth avenues OFS will generate regular and sustainable financial results and will have a positive impact on your customers, stakeholders and the ecosystem," the documents said.

Ola is reportedly looking at raising $1-1.5 billion (Rs 7,324-10,985 crore) via an initial public offering and is expected to file the DRHP (Draft Red Herring Prospectus) in the December quarter.

According to the RoC filing, Ola has been able to reduce its expenses both on consolidated (65 per cent) and standalone (75 per cent) basis across segments, including advertising and sales promotion.

The company also shared its financial documents for FY20 on RoC.

Ola had narrowed its consolidated loss to Rs 2,208.23 crore in FY20 from Rs 2,592.93 crore in FY19.

On a standalone basis, the losses expanded to Rs 1,714.62 crore in the year ended March 31, 2020 from Rs 1,160.27 crore in the preceding fiscal.

The company saw its total income rising 2.2 per cent to Rs 2,845.33 crore on a consolidated basis, and by 4.8 per cent to Rs 2,259.29 crore on standalone basis in FY20 as compared to the previous financial year, according to the documents that were accessed by market intelligence firm Tofler.

Photograph: Shailesh Andrade/Reuters