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    Ola records first operating profit in FY21 as expenses come down ahead of IPO

    Ola records first operating profit in FY21 as expenses come down ahead of IPO

    Ola records first operating profit in FY21 as expenses come down ahead of IPO
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    By Mugdha Variyar   IST (Updated)

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    This is the first time the company has reported an operating profit which comes ahead of its plans to hit the public markets soon.

    Ola has recorded an operating profit for the first time in FY21 for mobility business, regulatory filings sourced from Tofler show. This comes ahead of its plans to hit the public markets soon.
    Ola's standalone operating profit in fiscal 2021 was in the black with positive EBITDA at Rs 89.8 crore, 109 percent jump YoY.
    However, overall, the business was badly impacted during the pandemic year, with operating revenue down 65 percent to Rs 689 crore.
    On a consolidated basis, the company still registered a significant loss of Rs 1326 core, though it was down 22 percent year on year.
    Ola also reported a profit before tax and exceptional item (which entails allowance for impairment of investments, loans to subsidiaries), the filings showed.
    Ola's operational profitability was thanks to a steep cut in advertising costs by 63 percent and miscellaneous costs by 90 percent. The company did not break down miscellaneous costs.
    However, as the ride-hailing sector sees recovery, many expenses are likely to come back.
    "The fall in revenues can be attributed to lock downs and restriction in movement in the last financial year. The company also reduced its miscellaneous expenditure during the year, resulting in much reduced losses for the year. The company has not explained the nature of miscellaneous expenditure but it is likely to be marketing expenses and discounts," Anchal Agarwal, CEO of Tofler, said.
    In September Ola CEO Bhavish Agarwal had said that GMV had crosses pre-Covid levels.
    "India is moving again! Our @olacabs GMV crossed pre-covid levels last week. Recovery from second wave is 3 times faster. Clearly India is up and about!" he tweeted.
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