News

EV Maker Ampere Faces 46% Revenue Decline in FY24 as Losses Surge 11x

Electric scooter manufacturer Ampere, a key player under Greaves Electric Mobility, faced a harsh financial setback in FY24, with revenue tumbling by 46% to Rs 612 crore. The steep decline in scale drove its losses to balloon nearly 11 times, reaching Rs 215 crore.

Scooter Sales Plunge, Three-Wheelers Show Resilience

Ampere’s electric scooter sales, which historically contributed the lion’s share of its revenue, took a dramatic hit in FY24. The segment’s revenue dropped by 59%, landing at Rs 432 crore compared to the previous fiscal. This plunge coincided with a nearly 60% decline in units sold, signaling a challenging market environment for its two-wheelers.

However, not all was bleak. Ampere’s three-wheeler segment emerged as a bright spot, clocking a remarkable 2.5x growth to Rs 178 crore in FY24. While scooters made up 70.5% of the company’s revenue, the growing contribution of three-wheelers reflects a potential pivot in Ampere’s business strategy.

Ampere electric scooters

The company also earned Rs 2 crore from scrap sales and Rs 29 crore from non-operating income, which brought its total revenue to Rs 641 crore, a significant drop from Rs 1,159 crore in FY23.

Rising Costs and Operational Pressures

Despite scaling down its operations, Ampere struggled with rising costs in several areas. Material procurement, which represented 61% of its overall expenses, fell by 40% to Rs 526 crore, in line with the drop in revenue. Yet, employee benefit costs soared by 48.5%, reaching Rs 101 crore as the company expanded its workforce.

Overheads such as advertising, legal fees, warranties, and contracting services accounted for a substantial portion of the company’s expenses. Total expenditures stood at Rs 857 crore, down slightly from Rs 1,172 crore in FY23 but still far outpacing revenue.

To provide a clearer picture, Ampere’s cost breakdown reveals:

  • Procurement of materials: Rs 526 crore
  • Employee benefits: Rs 101 crore
  • Miscellaneous operational costs: Rs 230 crore

Financial Ratios Show Strain

Ampere’s financial metrics paint a grim picture of its FY24 performance. The return on capital employed (ROCE) plunged to -45.4%, while EBITDA margins fell to -27.46%. For every rupee earned, the company spent Rs 1.40, reflecting an unsustainable expense-to-earnings ratio.

Excluding an exceptional one-time cost of Rs 477 crore, the company’s net loss still reached Rs 215 crore, a sharp increase from Rs 20 crore in FY23. The mounting losses were attributed to the shrinking scale, higher employee costs, and a competitive EV market.

Current Assets Provide Limited Cushion

Ampere ended FY24 with total current assets of Rs 352 crore, including Rs 62 crore in cash and bank balances. While these resources offer some short-term financial stability, they are unlikely to offset the challenges posed by declining revenue and widening losses.

The Road Ahead for Ampere

Ampere’s FY24 performance underscores the volatility of the electric vehicle sector, particularly for manufacturers heavily reliant on scooter sales. With consumer preferences shifting and competition intensifying, the company faces a critical juncture.

While the growth in three-wheeler sales provides a glimmer of hope, Ampere must address its cost structure and operational inefficiencies to regain profitability. Investments in innovation, customer engagement, and market expansion may be essential to reversing its fortunes.

Comments

Your email address will not be published. Required fields are marked *