Ather Energy Ltd. saw its shares rally an impressive 18% in Tuesday's trading, reaching a new record high of Rs 1,500 apiece. This significant surge follows the electric vehicle manufacturer's announcement of substantially narrowed losses in the June quarter, alongside robust sales figures that have garnered 'Buy' ratings from a host of prominent brokerages.
Strong Q1 Performance Drives Investor Confidence
For the June quarter, Ather Energy's consolidated net loss significantly narrowed to Rs 51 crore, a sharp improvement from Rs 178 crore reported in the same period a year ago. This turnaround is attributed to structural business improvements and a notable scale-up in sales volumes. Consolidated total sales for the quarter climbed 87.2% year-on-year to Rs 1,260 crore, fueled by calibrated pricing strategies and a growing contribution from non-vehicle revenue streams such as software subscriptions, charging services, accessories, spares, and service, which now account for 14% of operational revenue.
Brokerages Maintain 'Buy' Ratings Amidst Rally
Following the positive results, a consensus of 13 brokerages has maintained a 'Buy' rating on Ather Energy, with no 'Sell' recommendations. Nomura set the highest target price at Rs 1,714, while Ambit Capital had the lowest at Rs 1,398. Other notable targets include CLSA and Emkay Global at Rs 1,600, JPMorgan at Rs 1,570, Nirmal Bang at Rs 1,538, Axis Capital at Rs 1,480, and HSBC at Rs 1,450. However, the current consensus target price of Rs 1,506.60 suggests a modest 3.9% upside after Tuesday's sharp rally, indicating that much of the immediate positive news may already be priced into the stock.
Demand Outstrips Supply for EV Two-Wheelers
Nirmal Bang highlighted that Ather's demand continues to significantly outpace supply, with dealer inventory reducing to just three days from 14 days in the previous quarter. Management estimates an unrealized retail demand of 13,000–15,000 units per month. The electric two-wheeler (E2W) market is experiencing rapid growth, with penetration reaching 11% and electric scooter penetration exceeding 25%. Industry registrations grew 68% year-on-year in Q1FY27. Ather's own performance metrics are strong, with enquiries rising 95% YoY, pre-orders increasing 158% YoY, and retail registrations growing 102% YoY, boosting its E2W market share to 16.8%.
Future Growth Catalysts and Cost Management
Looking ahead, key growth catalysts for Ather Energy include the eagerly anticipated launch of its EL platform on August 29 and the subsequent ramp-up of AURIC Phase 1 in Q3FY27, which will increase installed capacity. The company expects to largely offset an estimated 100–200 basis points of incremental cost pressure through recently announced price hikes, efficiencies from the new EL platform, and ongoing annual cost reductions. Emkay Global, reflecting this positive outlook, increased its target for Ather by 19% to Rs 1,600, citing strong growth potential.