Ather Energy Ltd sustained its momentum of narrowing operating losses in the June quarter (Q1FY27), igniting the stock, which jumped around 15% on Tuesday.
Including other income, the company reported an Ebitda profit in Q1. However, excluding other income, Ebitda loss persisted, though it narrowed sharply to ₹33 crore from ₹69.9 crore in Q4FY26 and ₹134 crore in Q1FY26. Ebitda margin, excluding other income, improved for the fifth consecutive quarter in Q1FY27.
Growth engine
Operating revenue surged 89% year-on-year to ₹1,217 crore, driven by an 81% jump in vehicle deliveries to 83,173 units. Ather has outpaced industry growth, supporting operating leverage.
While industry-wide registrations grew 68% year-on-year, with EV penetration crossing 10% for the first time in June, Ather's registrations rose 102%. This also outpaced the 81% wholesale growth, reducing dealer inventory from 14 days to just three days, suggesting wholesale dispatches need to catch up with retail demand.
Ather is gearing up for its next phase of growth. Backed by a ₹1,000 crore investment from Hero MotoCorp and another ₹1,300 crore raised through its QIP, the first phase of its Aurangabad Industrial City facility is scheduled for Q4FY27. This should expand annual capacity from 4.2 lakh units to 9.2 lakh units, with phase 2 eventually scaling it up to 14.2 lakh units. Alongside, its upcoming EL platform, slated to debut later this month, will underpin Ather's mass-market strategy.
Margin watch
Sure, gross margins remained under sequential pressure, declining 327 basis points to 19.7% in Q1FY27, owing to higher raw material costs for copper, aluminium, lithium, crude and related derivatives. The West Asia war, rising demand from data centres, and anti-involution in China are to blame.
This was partly offset by price hikes, a richer product mix and cost-cutting measures. Faster ecosystem growth also supported margins, as recurring non-vehicle revenue from software subscriptions, charging services and accessories increased.
Meanwhile, EL can expand Ather’s addressable market significantly, if received positively. But with the platform efficiencies unknown, the mass-market foray may turn margin-dilutive. Ather is gunning for 60,000 EL units per month.
Competition is intensifying too, from established players like TVS Motor and Bajaj Auto, as well as Ola Electric. Sustaining Ather’s pricing power as it moves down the price ladder will be critical. The stock has grown almost four-fold over the past year, so, execution will be key.