Ola Electric shares rise 5% after stating that PLI certification will boost profitability

Shares of Ola Electric Mobility Ltd. gained as much as 5% on Tuesday, August 26, after the company announced that it has secured PLI certification for its Gen 3 Scooter portfolio.The PLI certification granted to all seven S1 Gen 3 scooters, Ola Electric said in its statement to the exchanges.

This certification for Gen 3 Scooters is also important as it forms 56% of Ola Electric’s overall volumes.

The company highlighted in its exchange filing that the PLI Certification makes the company eligible for incentives for 13% to 18% of its sales value till 2028.
With this, both of Ola Electric’s Gen 2 and Gen 3 Scooter portfolio is now certified under the PLI benefits. Majority of the company’s current sales come from the Gen 3 portfolio.This classification and certification is likely to significantly enhance Ola Electric’s profitability from the ongoing quarter of the current financial year, the company’s statement said.

“With our auto business targeted to turn EBITDA positive, the certification acts as a strong catalyst to achieve that goal while ensuring our customers continue to get the best-in-class EVs at highly competitive prices,” the Ola Electric spokesperson said in the company’s statement.

Ola Electric reported a net loss during the June quarter, but they narrowed on a sequential basis, even as they widened from the same quarter last year.

The company’s revenue halved from last year, but increased on a sequential basis. The Gross Margins for Ola Electric, expanded on a year-on-year, as well as on a sequential basis.

Shares of Ola Electric Mobility are trading 5% higher at ₹50.96 after the announcement. The stock has gained 24% in the last one month.