Ampere, a subsidiary of Greaves Electric Mobility, an electric vehicle manufacturing company, has seen the most drastic decline in its financial performance for the fiscal year 2024, or FY24. In the latest quarterly results, the company revealed a shocking 46 percent decline in revenue, which primarily was due to a nearly 60 percent drop in scooter sales. The losses have multiplied more than 11 times over that of the previous year. The company’s future seems doubtful in a highly competitive market.
PC: BikeDekho
As per Ampere’s consolidated financial statements, its revenue from operations declined to ₹612 crore in FY24 from ₹1,124 crore in FY23. It is a dramatic contrast compared to the past two fiscal years when it had grown significantly. Its scooter sales business, which made up 70.5% of the total revenue, declined 59% to ₹432 crore. Three-wheeler sales saw a somewhat unexpected spurt of 2.5 times to ₹178 crore, reflecting the impact of competition from both traditional and new entrants in the market on consumer preferences.
Apart from its core business, Ampere earned ₹2 crore from scrap sale and ₹29 crore from non-operating activities, making the total revenue for FY24 ₹641 crore against ₹1,159 crore for FY23.
The cost structure for Ampere too has been severely affected. Procurement cost of materials formed 61% of the total expenditure, which declined by 40% to ₹526 crore in FY24 as the company tried to curtail operations. However, the rise in employee benefits increased by 48.5% to ₹101 crore due to a larger workforce.
Overall, Ampere’s spends stood at ₹857 crore in FY24, compared to ₹1,172 crore in FY23. Even though spending declined, the company recorded a dramatic increase in losses, which it incurred at ₹215 crore for the fiscal year— ₹20 crore in FY23. It has caused a sharp decrease in ROCE and EBITDA margins, which have crashed to -45.4% and -27.46%, respectively.
Competitive Landscape
The electric vehicle market is highly competitive, with big brands like Ola Electric, Hero, Bajaj, and TVS vying for market share. Market saturation and aggressive pricing from competitors have added to the pressure on Ampere’s sales and market share.
The leadership of the company is aware of these challenges but remains optimistic about future prospects, particularly with the parent company’s plans for an initial public offering (IPO) for its mobility division. Concerns remain, however, as to whether Ampere will be able to continue to operate without this vital funding if the IPO does not happen.
Ampere’s FY24 results paint a troubling picture for the EV maker, characterized by declining sales, soaring losses, and the need for strategic reevaluation. While the substantial growth in three-wheeler sales offers a glimmer of hope, the overall decline in revenue and increased operational costs necessitate urgent action. While Ampere faces these challenges, finding a way to regain recovery in a competitive market environment with the requirements of agility, innovation, and appropriate management strategies will be paramount. The next months are very important for Ampere as it seeks to stabilize its operations and regain investor confidence.
