Ather Energy Q2 losses cushioned by other income; HSBC cites a key risk

Shares of Ather Energy are trading with gains of as much as 6% on Tuesday, November 11. The electric scooter maker reported a mixed set of earnings for the September quarter.

Higher other income helped the company narrow its losses, even as expenses remained elevated. Revenue growth stayed strong, while market share expansion continued.

Ather Energy reported a net loss of ₹154 crore in Q2FY26, compared to ₹197 crore a year ago. Revenue rose 54% year-on-year (YoY) to ₹899 crore from ₹584 crore.

The company's EBITDA loss stood at ₹132 crore as against ₹138 crore in the same period last year, while total expenses rose 38% to ₹1,095 crore.

Other income jumped sharply to ₹42 crore from ₹15 crore last year, helping offset part of the operational losses. EBITDA loss on total income narrowed to ₹90 crore from ₹123 crore a year earlier.

Volumes grew 67% YoY and 42% quarter-on-quarter (QoQ), while adjusted gross margin stood at 22%, up 300 basis points YoY and down 100 bps sequentially.

Ather's market share increased 530 bps YoY, aided by continued store expansion. The company now operates 524 experience centres compared to 446 in the previous quarter and aims to increase its store count to 700 by the end of FY26.

Regionally, Ather maintained its leadership position in South India, with market share rising to 25% from 19.1% last year.

"Middle India", comprising Gujarat, Maharashtra, Madhya Pradesh, Chhattisgarh, and Odisha, emerged as the fastest-growing region, with market share improving to 14.6% from 8.8%. In the rest of India, market share climbed to 10% from 6.1%, with notable gains in Jammu & Kashmir, Punjab, and Rajasthan.

Brokerage firm HSBC has a 'Buy' rating on Ather Energy with a price target of ₹700.

The brokerage said Ather's gross margin expansion (adjusted for one-offs) led to a further reduction in EBITDA losses.

Strong market share performance was driven by store expansion, and the launch of the EL platform could offer additional upside. However, HSBC flagged the slow pace of electric vehicle penetration as a key long-term concern.

On the regulatory front, China's recent ban on heavy rare-earth magnets has impacted Ather's business, affecting its ability to submit incentive claims under the PM E-Drive scheme. This led to deferred submission of demand incentives and delayed revenue recognition of ₹19.2 crore.

Shares of Ather Energy ended sharply lower on Monday, down 4.68% at ₹624. The stock has declined nearly 11% over the last five trading sessions.

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