On 23 June, the stock of Ola Electric Mobility hit an all-time low of Rs 43. It was the second time in a month that somebody had sold a significant stake in the electric two-wheeler maker via a block deal.

Clearly, the market isn’t happy. In May, the company had reported dismal numbers for the March quarter. But its founder was quick to paint a rosy future.

“The company’s strategy and fundamentals remain very, very strong,” Bhavish Aggarwal declared in the earnings call. Expected higher gross margins and cost cuts will see the company achieve EbitdaEbitdaAn abbreviation for earnings before interests, tax, depreciation, and amortisation. The metric is used to assess a company's operating profitability break-even at 25,000 units a month and put it on a profitability path, he said.

Aggarwal had no choice but to dangle hope.

For the year ended March 2025, Ola’s sales volumes were down, and revenue had crashed by nearly 10% to Rs 4,645 crore. The company’s losses also zoomed over 40% from the previous year to Rs 2,276 crore ($262 million). The market voted with its feet. The stock currently trades far below its IPO price of Rs 76 and over 70% lower than the peak it hit soon after the public issue.

Things could get much worse. “It could go to zero,” said a stock-market analyst.

That’s because beyond the headline-grabbing volume dips and losses, the company’s cash flows, too, have turned precariously negative. Just in FY25, the group’s cash flow from operations stood at a negative Rs 2,391 crore—nearly four times worse than what it was in the year before. This was primarily on account of continued operating losses and lower-than-expected growth in sales volume.

Yet, the management believes “the group will be able to continue operating as a going concern for the foreseeable future,” according to note 8 in Ola’s latest consolidated financial results.

Its auditor, BSR & Co, underscores this assumption. The negative cash flow “requires the company to consider mitigating circumstances to support its operations and meet its continuing obligations,” the note said.

It added that the Ola management believes it will be able to meet its liabilities as they fall due—thanks to its cash and bank balances, expected future operating cash flows of a material subsidiary, operational efficiencies, credit limits, and ability to raise borrowings.