Shares of Ather Energy fell 4.6% on Tuesday to hit a day’s low of Rs 380.80 on the BSE, after the company reported a net loss of Rs 178.20 crore for the first quarter of FY26, compared to Rs 182.90 crore in the same period last year.

This indicates a 2.6% year-on-year reduction in losses.

Ather Energy posted a 97% year-on-year (YoY) volume growth in Q1. The company sold 46,078 units, fueled by rising demand for its flagship model Ather Rizta and an aggressive retail expansion strategy.

The company’s total income surged 83% YoY to Rs 672.9 crore in the quarter ended June 2025. A robust 117% increase in Adjusted Gross Margin to Rs 154.8 crore and a 1,700 basis point YoY improvement in EBITDA margin marked significant financial improvements. EBITDA losses narrowed to Rs 106 crore, and net losses post-tax reduced to Rs 178.2 crore.

Ather added 95 new Experience Centres (ECs) during Q1, expanding its national footprint to 446 ECs. This follows 86 EC additions in Q4 FY25.

The retail network boost has been instrumental in enhancing accessibility and lowering breakeven volumes, ultimately improving operational efficiency.Ather’s national market share nearly doubled to 14.3% during the period under review from 7.6% in Q1 FY25. The company retained its leadership in South India with a dominant 22.8% share and achieved 2.6x growth in Middle India (comprising Gujarat, Maharashtra, Madhya Pradesh, Chhattisgarh, and Odisha), reaching a 10.7% share.Non-vehicle revenue—comprising software, accessories, and services—contributed 12% of total income, benefitting from higher margins. Ather’s charging network also saw major growth, expanding to 4,032 points across India, Nepal, and Sri Lanka, up from 3,611 in the previous quarter.

The company continues to focus on profitability with sustained R&D-led engineering, a value-centric product mix, and growing contribution from non-vehicle revenue. Ather’s strategic deployment of multiple retail formats has further strengthened its scalability and cost structure, positioning it well for continued growth into FY27.

Following the Q1 results, domestic brokerage firm HDFC Securities noted that Ather Energy’s management has demonstrated strong capability in scaling revenue and improving margins, with the financial benefits expected to materialise sooner than previously anticipated.

The company’s robust R&D capabilities and operational agility are likely to enhance product performance, especially with the strategic shift toward using light rare earth magnets. This move mitigates the production risks associated with the earlier shortage of heavy rare earth magnets, which had posed a significant overhang.

Also read: NSDL IPO Allotment Date Live Updates: Issue allotment likely today; GMP at 15%; check other key details

Reflecting these positives, the brokerage firm has revised Ather’s valuation upward, applying a 4.0x EV/sales multiple (from 3.5x earlier), and set a target price of Rs 475, maintaining a ‘buy’ rating on the stock.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)