Ather Energy Hits Record High on Shrinking Losses and Sales Surge

Ather Energy’s recent market performance, marked by a 5.15% intraday surge to an all-time high of ₹982.5, reflects a pivot in investor confidence toward the company’s ability to scale revenue while simultaneously narrowing its bottom-line deficit. The stock, which later stabilized at ₹952.9, currently commands a market capitalization of approximately ₹36,357.7 Cr, or roughly $3.8 Bn. This valuation shift follows the release of FY26 results that demonstrated a 36.3% reduction in annual losses to ₹517.2 Cr, down from ₹812.3 Cr in the prior fiscal year.

The Mechanics of Margin Expansion

The primary driver of the current market enthusiasm is the company’s ability to decouple revenue growth from operational expenditure. Operating revenue for FY26 climbed 62.8% to ₹3,671.8 Cr, a significant acceleration compared to the ₹2,255 Cr reported in FY25. More importantly, the company managed to cut its annual EBITDA loss by 51.6% to ₹257 Cr. This improvement is reflected in the EBITDA margin, which shifted from -23% in FY25 to -6.7% in FY26.

In the final quarter of the fiscal year, the trend became more pronounced. Quarterly revenue jumped 73.7% year-over-year to ₹1,174.7 Cr, while the EBITDA loss narrowed to ₹30 Cr. The quarterly margin improvement to -2.5%, compared to -23.3% in the year-ago period, suggests that the company is approaching an operational inflection point. However, total expenses for the quarter rose 42.2% to ₹1,314 Cr, indicating that the cost of scaling remains a significant hurdle that investors must monitor as the company pushes for further market penetration.

Volume Growth and Retail Footprint

Ather’s ability to move units remains the cornerstone of its growth narrative. The company sold 2.63 Lakh units in FY26, a 69% increase over the previous year, with Q4 delivering a record 83,418 units. This volume growth is directly tied to a massive expansion of the company’s physical footprint. Ather nearly doubled its experience centers from 351 to 700, while its service network grew to 548 locations.

The introduction of the Rizta family scooter has been a key catalyst for this demand, allowing the company to capture a broader demographic beyond its traditional performance-focused base. Furthermore, the company’s charging infrastructure has reached 6,000 points, with 13% of users being non-Ather customers. This indicates that Ather is successfully positioning its infrastructure as a utility, potentially creating a secondary revenue stream or at least a powerful brand-loyalty mechanism that lowers the barrier to entry for prospective buyers.

Supply Chain Constraints and Regulatory Hurdles

Despite the positive top-line growth, the company’s operational path is not without friction. Production was hampered in Q2 and Q3 due to China’s export restrictions on rare earth magnets, forcing Ather to alter its manufacturing processes. These changes caused a temporary misalignment with India’s Phased Manufacturing Programme, resulting in the deferral of ₹24.5 Cr in incentives.

Additionally, the company is navigating the volatility of lithium-ion battery prices. To mitigate these global supply constraints, Ather has begun integrating lithium iron phosphate (LFP) batteries. This move is intended to provide greater supply chain flexibility and long-term cost efficiencies. While this transition is a necessary defensive measure, it introduces execution risk regarding product performance and consumer reception of the new battery chemistry. Investors should consider how these supply chain pivots impact the company’s ability to maintain its current margin trajectory in the coming quarters.

Brokerage Sentiment and Valuation Outlook

Brokerage houses have reacted to these results with a focus on long-term growth visibility. HSBC has maintained a ‘Buy’ rating with a target price of ₹1,050, acknowledging that while commodity headwinds may delay the timeline to full profitability, the core investment thesis remains intact. Nomura also holds a ‘Buy’ rating with a target price of ₹1,120, identifying Ather as a top pick in the electric two-wheeler segment.

Both firms emphasize that volume growth, driven by new platform launches and network expansion, will be the primary determinant of the stock’s future performance. For those evaluating the current valuation, the key is to weigh the company’s rapid revenue growth against the reality of ongoing margin pressure. While the narrowing losses are a positive signal, the sustainability of this trend depends on Ather’s ability to manage its cost base while navigating global supply chain dependencies. For context on broader sector trends, one might look at stock market analysis to compare Ather’s trajectory against other players in the EV space. If the company can successfully navigate the remaining regulatory and supply chain hurdles, the current valuation may be supported by its increasing market share and infrastructure dominance.