Ather Energy posts net profit in September quarter alongside major production expansion

Ather Energy shares climbed nearly 5% on Tuesday, October 27, following a profitable September quarter and a fresh expansion announcement. The electric two-wheeler maker reported a consolidated profit after tax of ₹ 1.26 crore for Q2, marking a sharp turnaround from a loss of ₹ 154 crore in the same period last year.

Financials and Sales

Consolidated revenue from operations grew 63% year-on-year to reach ₹ 1,464.2 crore during the July-September quarter, compared to ₹ 898.9 crore previously. Vehicle sales went up 44% to 93,000 units, giving the firm a 15.1% market share in the electric two-wheeler segment. EBITDA stood at ₹ 74.2 crore, marking the company's second consecutive quarter of positive EBITDA despite high commodity costs.

Production Expansion

The company board approved a ₹ 122 crore investment plan to push total annual production capacity to about 11.4 lakh units by Q2 FY28. This includes spending ₹ 58 crore at the Hosur plant to raise capacity from 4.20 lakh to 4.95 lakh units, and up to ₹ 64 crore at Factory 3.0 in Chhatrapati Sambhajinagar to lift planned capacity from 5 lakh to 6.50 lakh units. The funding will come from debt and internal accruals.

Analyst Views

Emkay Global Financial Services kept a 'Buy' rating on the stock and raised its target price to ₹ 2,250. Ruchit Jain, Head of Equity Technical Research at Motilal Oswal Financial Services, stated that the stock remains in a broader uptrend with support at ₹ 1,480 and ₹ 1,350.

Context

Electric vehicle makers in India are scaling up manufacturing capacity to meet fast-growing local demand while trying to manage supply chain costs. Companies often fund these large capital projects through a mix of internal savings and debt borrowing.