Emkay Sees 40% Upside in Ather Energy on Strong EV Demand

Shares of Ather Energy could see an upside of nearly 40%, according to a latest research note by Emkay Global Financial Services, which has reiterated a “Buy” rating on the electric two-wheeler maker with a target price of ₹1,000.

The brokerage said robust demand in India’s electric two-wheeler (E-2W) segment and the upcoming EL platform are expected to significantly expand Ather’s total addressable market (TAM), improve margins, and accelerate market share gains.

The domestic E-2W market has been witnessing strong growth, clocking 20–30% year-on-year expansion between December 2025 and February 2026, led by the premium segment above ₹1 lakh.

Importantly, the rise in internal combustion engine (ICE) two-wheeler sales has not slowed EV adoption, indicating sustained consumer interest in electric mobility.

However, Emkay cautioned that the expiry of government incentives under the PM E-Drive scheme in March 2026 could lead to a price hike of around ₹5,000 per vehicle, while geopolitical tensions may temporarily impact costs.

EL Platform to be a Key Growth Driver

Ather’s upcoming EL platform, targeting the ₹1–1.3 lakh segment—which accounts for nearly 50% of the market—is expected to be a major catalyst for growth.

The platform focuses on cost-efficient design changes, such as simplified mechanical components, while retaining the company’s software and quality standards. This is likely to improve margins and allow Ather to compete more effectively in the high-volume mid-market segment.

The brokerage noted that the platform could also drive 70–80% volume growth, particularly in non-southern markets where Ather is expanding its presence.

Capacity Expansion and Profitability 

Ather’s new manufacturing facility, AURIC, with a capacity of 42,000 units per month, is expected to be fully operational before the end of FY27.

The company is likely to launch high-volume variants once the plant stabilizes, with margin benefits expected to accrue in subsequent quarters.

Emkay expects Ather to achieve EBITDA and PAT breakeven in the second half of FY27, supported by strong volume ramp-up and operational efficiencies.

The report highlighted Ather’s software ecosystem as a key differentiator, with about 91% of customers opting for its proprietary “Ather Stack,” often paying a premium for features such as cruise control and auto-hold.

Brand awareness has also improved following recent product launches, with test ride-to-purchase conversion rates exceeding 60%.

On the distribution front, Ather plans to expand its retail network from around 350 stores to 700, largely through existing dealer partners.

Outlook

While competitive intensity is expected to remain high—especially with legacy and global OEMs entering the EV space—Emkay believes Ather is well-positioned to benefit from rising EV penetration in India.

The brokerage maintains that Ather’s combination of strong demand momentum, cost-efficient platform strategy, and software-led differentiation underpins its positive outlook on the stock.