Shareholding data shows that DII ownership in the company has risen consistently since its stock market debut in May last year. In the June quarter of FY27, domestic institutional ownership increased to 21.1% from 20.5% in the previous quarter. Over the preceding four quarters, DIIs steadily raised their stake from 12% in June FY26 to 18%, continuing to add to their holdings and reaping returns as the stock rallied a staggering 275% over the past year.
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At a time when many automobile companies are grappling with inflation-led demand pressures, Ather finds itself in a different position. Its production facilities are running at full capacity, yet still fall short of meeting demand for its products. During the first quarter of FY27, the company said demand for electric two wheelers accelerated sharply, with industry registrations rising 68% year on year to around 525,000 units.
EV penetration also crossed the 10% mark for the first time in June 2026. Against this backdrop, Ather continued to witness strong traction across its customer funnel. Customer enquiries jumped 95% year on year to 707,000, while pre orders surged 158% year on year to 150,000, highlighting sustained demand that continued to outpace the company’s production capacity during the quarter.
Can Ather Energy shares rally more?
Nomura remains the biggest bull on the stock, with a target price of Rs 1,714. The brokerage has retained Ather as its top pick in the electric two wheeler segment, saying EV penetration in India has reached an inflection point, with demand continuing to outpace supply. It expects the upcoming EL platform to nearly double the company’s total addressable market while significantly lowering costs.
The brokerage believes improving scale and operating leverage should help Ather achieve EBITDA breakeven by FY28. It also sees the company’s potential entry into the motorcycle segment as a long term growth opportunity. In addition, policy measures such as restrictions on ICE vehicles or additional EV incentives from more states, along with Ather’s inclusion in the PLI scheme, could provide further upside.Ather’s volumes rose 81% year on year in the first quarter of FY27, comfortably outpacing the electric two wheeler industry’s 68% growth.
Also read: India’s EV sales hit record high as e-2W cross 2 lakh mark
HSBC said the company’s margin performance was driven by a sharper than expected decline in other expenses. The brokerage noted that management remains confident of strong volume growth and a recovery in market share once additional production capacity comes on stream. It added that Ather’s strong brand in the electric vehicle segment and consistent execution justify a premium valuation.
HSBC also highlighted that the upcoming Factory 3.0, with an annual capacity of 500,000 units, is expected to remove the production bottleneck from the third quarter of FY27. The brokerage added that recent price hikes and cost reduction measures should support margins, while the launch of the EL platform during the festive season is likely to sustain volume momentum.
Ather’s growth map
Ather Energy’s management said the company currently sees an unrealised retail sales potential of 13,000 to 15,000 units per month, while dealer inventory has been reduced sharply to three days in Q1FY27 from 14 days in the previous quarter, reflecting improved demand and inventory management. It also highlighted that the service business remains its biggest ancillary revenue growth driver, with Tier 2 and Tier 3 cities increasingly emerging as the largest contributors to sales volumes.
On margins, the management believes the peak of commodity cost pressures is now behind, adding that the structural gains achieved by the company are expected to outlast the commodity inflation cycle and continue supporting profitability over the coming quarters. While it expects a residual commodity cost impact of around 100 to 200 basis points in Q2, it also noted that some costs could rise as the AURIC facility ramps up, likely from Q4FY27E onwards.
Production boost
Ather Energy said production of its EL scooter has already begun at its Hosur plant and will eventually be shifted to its upcoming Aurangabad (AURIC) facility. The company plans to have a combined manufacturing capacity of 60,000 EL scooters per month across the two plants. It also clarified that its motorcycle launch remains more than two years away.
The Hosur plant currently has an annual production capacity of 420,000 units, or around 35,000 units per month, and is operating at nearly 100% utilisation. To meet rising demand, Ather continues to invest in the AURIC plant, where Phase 1 will add 500,000 units of annual capacity. Once commissioned later this year, the company’s total annual manufacturing capacity will increase to 920,000 units. Management, however, believes that even this capacity could prove insufficient if demand continues on its current trajectory.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)