Ather Energy shares jump another 7% after Q2 results; Nomura calls it top pick on attractive valuations

Shares of electric two-wheeler maker Ather Energy Ltd. gained another 7% on Tuesday, October 27, extending the previous session’s 17% rally after the company reported its first-ever quarterly net profit and turned EBITDA-positive in Q2 FY27.

Brokerages remained positive on the stock, with HSBC retaining its ‘Buy’ rating and raising its price target to ₹1,800. Nomura also maintained a ‘Buy’ recommendation, with a target price of ₹2,070.

HSBC said Ather delivered a strong second quarter, with an unexpected EBITDA break-even despite pressure from elevated commodity costs. The brokerage believes the company’s operating resilience could strengthen investor confidence in its ability to scale over the long term.

However, a muted market response to the Konarc scooter range remains a near-term risk.

Nomura highlighted Ather’s better-than-expected average selling prices (ASPs) and margins, along with stronger bookings. The company’s EBITDA margin came in at 0.8%, against Nomura’s estimate of -2.6% and the consensus estimate of -2.7%.

The brokerage said the Konarc rollout improves growth visibility and reaffirmed Ather as its top pick in the two-wheeler space.

Nomura also considers Ather’s valuation attractive at 4 times its estimated FY29 enterprise value-to-sales, given its higher growth potential relative to peers.

Ather Energy Q2 FY27 results

Ather Energy reported a net profit of ₹1.26 crore for the quarter, compared with a net loss of ₹154 crore in the year-ago period. EBITDA stood at ₹11.3 crore, against a loss of ₹133 crore a year earlier, while the EBITDA margin came in at 0.77%.

Revenue rose 62.8% year-on-year to ₹1,464 crore from ₹899 crore, supported by a 42% increase in volumes to 93,000 units.

Separately, Ather Energy’s board approved capacity expansion at its manufacturing facilities in Hosur, Tamil Nadu, and Chhatrapati Sambhajinagar, Maharashtra, to support higher production and meet future demand.

Capacity expansion plans

Ather expects trial production at Phase 1 of its Chhatrapati Sambhajinagar facility to begin in the coming weeks, with capex and capacity installation scheduled for completion by Q4 FY27. The company’s additional capacity of 6,000 units per month at Hosur is expected to become operational this quarter.

Phase 1 at Chhatrapati Sambhajinagar is slated to add capacity of 12,500 units per month by Q2 FY28. With these additions, Ather’s total installed annual capacity is expected to reach 11.4 lakh units by Q2 FY28.

Ather has initially launched the mid-range SR2 and SR3 variants of Konarc, with the entry-level version scheduled for Q4 FY27. Management expects the entry-level variant to contribute higher volumes.

The rollout will expand from Uttar Pradesh and Rajasthan to Madhya Pradesh, Bihar, Maharashtra, Gujarat and Punjab, before reaching southern markets. The southern expansion is expected to follow the commissioning of the Chhatrapati Sambhajinagar facility. Ather expects its addressable market to widen over the next 12–18 months as additional Konarc variants are introduced.

Ather does not plan to increase ex-showroom prices further over the next few quarters and has ruled out additional hikes this quarter. Management said a like-for-like comparison could eventually see Konarc deliver 6–10% higher gross margins than the Rizta. However, volatility in component costs makes the near-term cost outlook difficult to predict.

Ather has deliberately moderated its dealer network expansion to avoid leaving dealers with inventory that cannot be served by available supplies. The company expects to resume a more aggressive expansion pace from late Q3 or Q4 FY27 as additional manufacturing capacity comes online.

Management did not provide a launch timeline or guidance for an electric motorcycle, saying development and technology work remains ongoing.