Summary
Ather Energy Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 5:00 PM
Event Participants
Executives 3 Murali Sashidharan (Head of Public and Government Relations), Sohil Parekh (CFO), Tarun Mehta (CEO)
Analysts 6 Amyn Pirani, Chirag Jain, Kapil Singh, Manish Ostwal, Mukesh Saraf, Nishit Jalan, Nitin Arora, Pratiti, Vijay Pandey
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Units Sold (Wholesale) | 67,800 units | +50% YoY; strong demand for Rizta, which crossed 2 lakh cumulative units this quarter. |
| Total Income | ₹995 crores | +53% YoY; driven by volume growth and rising non-vehicle revenue contribution. |
| Adjusted Gross Margin (AGM) | 25% | +700 bps YoY, +300 bps QoQ; aided by lower COGS, software sales, and better subsidy claims. |
| EBITDA Margin | -3% | +1,600 bps YoY, +700 bps QoQ; significant improvement due to operating leverage and fixed cost discipline. |
| Non-Vehicle Revenue | 14% of Total | Highest ever; driven by software ProPack sales (91% attach rate) and charging infrastructure. |
| ASP (Revenue per unit) | ₹1.4 lakhs | Focus on premium positioning while improving manufacturing efficiency. |
| Bill of Materials (BOM) | ₹1.11 lakhs | -8% vs FY25; attributed to LFP transition and manufacturing engineering (ME) optimizations. |
Geographic & Segment Commentary
- Middle India (Gujarat, MP, Maharashtra): Market share increased from 14.6% to 17.4% QoQ. Gujarat reached 25% share, while Maharashtra hit a record 18.6%. Management sees “more juice” in this region, particularly in Odisha where share doubled to 15%.
- South India: Retained leadership with 24.4% market share despite intense competition. Management remains focused on defending this zone as a core stronghold.
- Rest of India (North/East): Market share reached 12.6%. Rajasthan and Punjab are performing like Middle India markets with 14-16% share. Management is preparing these regions for the upcoming “EL” platform launch.
Company-Specific & Strategic Commentary
- EL Platform: A new lower-cost architecture scheduled for launch later this year to target the ₹1-1.25 lakh price segment. It features a steel frame and enclosed gearbox, aimed at North India expansion with potential manufacturing starting in Hosur to de-risk AURIC timelines.
- Software Monetization (ProPack): Achieved 91% attach rate with 50% DAU for onboard navigation. Management noted that as stores age, attach rates increase; new features like “Infinite Cruise” are being pushed via OTA to 40,000 units to increase stickiness.
- Charging Infrastructure: Largest fast-charging network in India with 5,000 points. The network is transitioning from a cost center to a monetized asset using the LECCS protocol.
- Vertical Integration: Announced entry into auto insurance as a corporate agent to control consumer experience and provide margin-accretive revenue.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Distribution Reach | 700 stores by FY26 end | Currently at 600; expansion is linked to Rizta’s viability in new markets. |
| EBITDA Trajectory | Strengthening exit for FY26 | Management expects the FY26 exit margin to be better than the -9% YTD average. |
| EL Platform Launch | Later this calendar year | Aimed at white-space entry in the ₹1 lakh segment where Ather currently lacks presence. |
| International Markets | Mid-to-long term growth | Currently experimenting in Nepal and Sri Lanka; EL platform is designed with global wheelbase/wheel size flexibility. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Inflation | Aluminum, copper, and specific battery chemistries are seeing “unprecedented” volatility. This presents a risk of several percentage points to margins in remaining FY26. |
| Regulatory/Subsidy | Potential pullbacks in subsidies (PM E-drive expiry in March) and uncertainty around ABS/EBS mandates. Ather’s non-PLI status makes it more resilient to policy shifts but creates a cost disadvantage vs peers. |
| Supply Chain | While the Chinese magnet ban impact is over, management remains cautious of EV-specific process costs and logistics. |
Q&A Highlights
EL Platform Strategy
- Question: Will EL cannibalize existing products like Rizta? (Nitin Arora)
- Answer: Some cannibalization is expected, but management is “happy” with it because EL has a superior underlying cost structure. EL will primarily target white spaces in the ₹1-1.25 lakh segment where Ather currently has no presence (Tarun Mehta).
Pricing and PLI
- Question: How does not having PLI affect your pricing power? (Kapil Singh)
- Answer: Not having PLI is a strength as it ensures a “clean” pricing architecture without the risk of a cliff when the policy ends in FY28. Ather took a ₹3,000 price hike in Q4 to offset commodity risks (Tarun Mehta).
Cost Reduction Levers
- Question: Where do you see further cost reduction potential? (Kapil Singh)
- Answer: 10-20% long-term potential remains. Immediate gains will come from mechanical design (steel frames, gearboxes) and “Manufacturing Engineering” to reduce process/logistics flap as scale hits 40k-50k units/month (Tarun Mehta).
Software and Non-Vehicle Revenue
- Question: Is software adoption lower in value-conscious markets like Odisha? (Mukesh Saraf)
- Answer: No, ProPack attach rates are more linked to store vintage than geography. As retail partners become comfortable upselling software, attach rates rise across all regions (Tarun Mehta).
Key Takeaway
Ather Energy delivered a robust Q3 FY26, characterized by 50% YoY volume growth (68,000 units) and a significant 1,600 bps YoY improvement in EBITDA margins, landing at -3%. The quarter’s success was anchored by the Rizta family scooter and a high 14% contribution from non-vehicle revenues, particularly the software ProPack which maintains a 91% attach rate. Strategic focus is now shifting toward the upcoming “EL” platform, a lower-cost architecture designed to unlock the ₹1-1.25 lakh price segment and North Indian markets. While management anticipates commodity headwinds for the remainder of the year, they remains confident in achieving an improved EBITDA exit rate through operating leverage and disciplined fixed-cost management. Ather’s non-reliance on PLI subsidies is positioned as a long-term competitive advantage for P&L resilience post-2028.
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