Ather Energy extends rally, EV stock surges 20% in 2 days; here's why

Ather Energy: Overall, the outlook is positive, with volume growth, Konarc's market acceptance and sustained profitability being the key triggers to watch, say analysts at ICICI Securities.

Ather Energy share price movement

 

Share price of electric vehicle (EV) two-wheeler maker Ather Energy soared 6 per cent to ₹1,660 on the BSE in Tuesday’s intraday deals amid heavy volume in an otherwise subdued market. In the past two trading days, the stock surged 20 per cent after the company reported its first-ever profit after tax (PAT) of ₹1.26 crore for the second quarter (July to September) of the financial year 2026-27. 

 

The company’s board also approved plans to increase annual production capacity across its plants by an additional 225,000 units per annum by the July-September quarter of 2027-28 (Q2FY28).

 

At 09:58 AM, Ather Energy quoted 5 per cent higher at ₹1,656.70, compared to a 0.20 per cent decline in the BSE Sensex. A combined 5.57 million equity shares changed hands on the NSE and BSE in first 43 minutes of trade.

 

 

Ather Energy – Q2 results

 

Ather Energy delivered an improved performance in Q2FY27 with vehicle sales volume growing 42 per cent year-on-year (YoY) to 93,211 units (up 12 per cent quarter-on-quarter (QoQ)) and total operating income rising 63 per cent to ₹1,464 crore. Earnings before interest, tax, depreciation and amortization (EBITDA) margins improved to 0.8 per cent vs. negative 2.7 per cent reported in Q1FY27. Notably, gross margins improved to 21 per cent from 20 per cent in Q1FY27 even amidst higher input costs.  

 

EBITDA stood at ₹74.2 crore, marking Ather’s second consecutive EBITDA-positive quarter, despite elevated commodity costs. Consolidated PAT for the quarter was ₹1.26 crore, compared with a loss of ₹154 crore a year earlier. 

 

Ather in a press release, said the company saw a sharp rise in customer interest, with enquiries up 109 per cent YoY to about one million, while pre-orders more than doubled to 180,000 in Q2FY27. Demand outpaced available production capacity, with the Hosur facility operating at 98 per cent capacity utilisation during peak production in Q2FY27, the company said.

 

Annual Capacity enhancement by 225,000 units

 

To meet rising demand, Ather will increase annual production capacity at Hosur by 75,000 units, from 420,000 to 495,000 units by December 2026. Ather’s new facility in AURIC, Chhatrapati Sambhajinagar, is on track to begin commercial production in phases from December 2026, with Phase 1 having an annual production capacity of 500,000 units. Ather will further expand the plant’s annual capacity by 150,000 units to 650,000 units, with the additional capacity expected to commence production by Q2FY28. 

 

With these expansions, Ather’s combined installed annual capacity across Hosur and AURIC will reach approximately 1.14 million units by Q2FY28. The company will invest approximately ₹122 crore across the two facilities to support these capacity enhancements.

 

ICICI Securities view on Ather Energy post Q2 results

 

The quarter is encouraging because growth is being supported by both stronger demand and improving unit economics, while the launch of the mass-market Konarc could widen Ather’s addressable market beyond its traditionally premium positioning, ICICI Securities said in a note.

 

Enquiries rose 109 per cent and pre-orders 108 per cent YoY, and management estimates that current demand could support an additional 18,000–20,000 monthly retail sales at existing stores; it is therefore expanding capacity at Hosur and AURIC, taking planned annual installed capacity to 1.14 million units by Q2FY28. 

 

Importantly, management indicated that it does not intend to raise prices further over the next few quarters, with Konarc potentially improving affordability without compromising margins. However, the positive PAT of ₹1.26 crore remains thin, commodity inflation is still a risk, part of the recent margin improvement came from temporary SKU and incentive management, and new capacity will take time to ramp up. Overall, the outlook is positive, with volume growth, Konarc’s market acceptance and sustained profitability being the key triggers to watch, the brokerage firm said. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.