ANI Technologies Pvt. Ltd, which operates homegrown cab-hailing major Ola, reported a nearly 57% rise in operating revenues and halved its losses even as gross expenses remained almost stagnant for the financial year through 31 March 2018.
According to the company’s consolidated financial statement filed with the Registrar of Companies, the firm’s operating revenues rose to Rs 1,847.53 crore from Rs 1,177.78 crore in the previous year.
As per the financial statements, Ola recognises operating income under the following heads—commission income and convenience fee, subscription income and lease rentals. Besides, the company recognises as part of its operating income data charges it gets from its operators and driver partners.
Net losses almost halved to Rs 2,843. 96 crore, from Rs 4,898.13 crore the previous year. Likewise, gross expenses for the period also showed a marginal reduction at Rs 5,066.58 crore, down from Rs 5,183.55 crore in the year prior.
Consequently, the aforementioned figures indicate that the company burned Rs 422.21 crore a month to earn monthly operating revenues of Rs 153.96 crore. Likewise, it also means that the company lost Rs 1.53 for every rupee earned. In 2017-18, Ola had lost Rs 4 for every rupee earned.
E-mail queries sent to Ola seeking more comments on the company’s latest financials did not elicit a response at the time of publishing this report.
Ola’s other expenses stood at Rs 3,872.90 crore, accounting for 76% of the total expenditure, down from Rs 4,181.61 crore the previous year. Miscellaneous expenses were Rs 2,747.33 crore, accounting for nearly 70% of this expenditure head.
Ola’s efforts to stay ahead of competition also reflected in its advertising and promotional expenses, which rose by 42% to Rs 406.24 crore, from Rs 284.94 crore in 2017-18.
Likewise, other significant expenditure heads include depreciation expenses, which is calculated based on the estimated running life of its motor vehicles, showed a three-fold rise at Rs 284.06 crore, from Rs 94.20 crore the previous year. IT expenses also increased to Rs 254.05 crore from Rs 176.04 crore the previous year.
Employee benefit expenses, which is not part of its ‘other expenses’, stood at Rs 574.67 crore, up from Rs 572.17 crore the previous year.
However, the numbers are in sharp contrast to the estimates by Ola’s fair valuation adviser and highlight the challenges the ride-hailing company faces in turning a profit.
Jain Ambavat & Associates, the audit firm Ola hired to assess its valuation in 2017, had estimated that the company would make a net loss of Rs 2,988 crore for 2016-17. It had also estimated that Ola would earn a net profit of as much as Rs 5,996 crore ($930 million) in the year through March 2021.
In its efforts to keep competition at bay, Ola has entered several overseas markets, including Australia, the UK and New Zealand. It also acquired Foodpanda’s India operations from Germany’s Delivery Hero in late 2017. Foodpanda has expanded to 100 cities.
The company has raised $174 million over the past month from Flipkart co-founder Sachin Bansal and existing investor Steadview Capital in two separate capital infusions. Ola is currently valued at around $5.7-5.8 billion.