Shares of Ather Energy Ltd climbed 13 per cent in Tuesday’s trade, following its strong set of December quarter results. Analysts said the December quarter results demonstrated that pro-pack provides it a significant competitive edge, driving both market share and margins.
Nomura India said Ather Energy remains its preferred pick in the two-wheeler space. Emkay Global raised its volume estimate to factor in the strong ramp up via the EL platform (built in ASP moderation) and believe that Ather can achieve Ebitda and PAT breakeven in H2FY27. The stock rose 12.88 per cent to hit a high of Rs 684.85.
During the quarter, Ather Energy sold 67,851 units, captured a national market share of 18.8 per cent, and improved Ebitda margin by 1,600 basis points (bps) year-on-year (YoY) to minus 3 per cent. Losses continued to shrink, with Ebitda loss down to Rs 29.9 crore, and the quarterly loss narrowing by 45 per cent compared to Q2FY26.
Nomura said store expansion, and launch of the “EL” platform in FY27E should be key growth drivers. Motorcycle launch in the future could offer an added optionality, it said. It maintained its target multiple of 5 times EV/sales on Ather Energy against 3.5-6.8 times range for peers. It rolled forwarded its valuation to FY28.
“Ather trades at 3.8 times FY28 EV/sales, which is attractive, in our view, as Ather’s potential medium-term growth is the highest within our coverage universe. We also believe Ather’s medium-term margins will be 10 percentage points higher than the EV industry average (potentially 20 per cent) given its premium positioning and higher software revenues,” Nomura said.
Emkay Global said it retained its ‘Buy’ rating on Ather Energy with revised target price of Rs 1,000 from Rs 925 earlier. The company management believes the E-2W industry can sustain the current 30-40 per cent growth ahead and Ather’s upcoming optimized EL platform would widen its TAM via foray into the Rs 1-1.3 lakh segment (the market’s belly), where it is currently absent, and drive market-share gains (particularly in the non-South markets).
EMkay said Ather’s superior cost structure is likely to drive margin expansion, while also addressing commodity related headwinds. Ather sees major scope in raising its non-vehicle revenue share led by the inherent stickiness, it noted.
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