Shares of Ola Electric Mobility Ltd slid after media reports indicated the company plans to shrink its network of physical stores by roughly 550 locations in the March quarter. The stock fell by about 2%, touching a record-low level of 26.83 rupees.
The store-reduction reports arrive on the back of a difficult period for the electric vehicle maker. Just a week earlier the company recorded its lowest quarterly revenue on record amid a prolonged slump in sales.
According to published reports citing people familiar with the matter, the planned closures are a response to a sharp drop in market share and growing operational challenges tied to the business. Analysts and market observers have pointed to multiple headwinds that have pressured volumes and profitability.
Ola, which primarily retails electric scooters, saw sales plunge by more than 50% in the December quarter. At the same time, rising costs have eroded the company’s margins and bottom line, contributing to the recent market reaction.
Management has acknowledged the role of service-related issues in weakening demand. Chairman and founder Bhavish Aggarwal has said consumers have lost trust in the brand because of problems with product quality, reliability, and after-sales service. He added that the company is working to improve its products and is aiming to reach breakeven, though he did not set out a clear timetable for achieving that target.
The company has also faced intensifying competition from established automakers and newer premium entrants. Market pressure from legacy manufacturers such as TVS and Bajaj, alongside premium rival Aether, has weighed on Ola’s sales performance over the past year.
Investors will be watching whether the planned reduction in store count and the company’s product and service remediation efforts can stabilize volumes and margins. For now, the stock’s move to a record low reflects investor concern about both near-term performance and the pace at which operational improvements and trust restoration can take place.
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