Ather Energy: A pure play on the fastest growing category in Indian 2Ws; initiate at OW

Research evidence excerpt

Ather Energy: A pure play on the fastest growing category in Indian 2Ws; initiate at OW

5% Market consolidation (legacy OEMs + larger start-ups) has improved customer 21

perception of product reliability as well as re-sale value. EVs are also seen as 0 0%

FY23 FY24 FY25 FY26 FY27E FY28E FY29E FY30E FY31E

an upgrade due to OEMs' ability to offer software-driven features. We expect

Total 2W EV industry volumes domestic EV penetration - RHS

2W EV volume CAGR (FY26-31) of 32% vs. 2W industry CAGR of 6.3%.

Source: SIAM, Vahan, J.P. Morgan estimates

• New platform launch and capacity expansion should drive market-share

gains: Ather originally focused on dominating the niche premium EV segment

(450X) but its overall market-share was <10%. It entered the mass-premium Ather’s domestic EV mk-shr is expected to

increase as it unlocks capacity category with the Rizta, which expanded its market-share to 14%. It is about

to launch its “EL” platform, which should expand its presence in mass- 25.0%

premium as well as mass. It is also expanding capacity from 0.4m to 0.9m 20.0%

(eventually 1.4m). We expect Ather’s market-share to expand from 17% in 15.0%

FY26 to 23% by FY31, driving a volume CAGR of 40%.

10.0%

• Commands a gross margin premium due to premium positioning and 5.0%

software features: Ather’s pricing is at a premium to like-for-like models due

to better features. The company is also able to charge more for software-driven 0.0% FY23 FY24 FY25 FY26 FY27E FY28E FY29E FY30E FY31E

features. Ather’s gross profit per unit is already 35% higher than its ICE peers. Source: Vahan, SIAM, J.P. Morgan estimates

This implies that EBITDA margins (currently -11%) could converge with ICE We expect Ather to gain mkt-shr with “EL”

if the company is able to execute its planned volume growth.