Ather Energy shares climb 4% as Nomura raises target price; what foreign brokerage says

Shares of Ather Energy Ltd climbed 4 per cent in Thursday's trade after foreign brokerage Nomura upped its target on the stock, saying faster EV adoption has strengthened Ather’s outlook and that Konarc launch could drive more upside. Ather Energy Ltd climbed 4 per cent to hit a high of Rs 1,646.45 on BSE.

With the launch of Konarc, Ather has further reinforced its tech leadership, Nomura said. It noted that Konarc introduced a suite of features including Advanced Electronic Braking System (AeBS), MagicKey, AutoPop and AirWalk for easier everyday experience on Z variants.

"We believe the EL platform will double the TAM for Ather, with its scalable architecture, and should enable Ather to offer products at more competitive price points while retaining its tech-led differentiation. The success of the new motorcycle platform in the future can provide further upside to our estimates," Nomura said.

It believes the ongoing shift towards "scooterisation" should further aid in EV adoption. It, therefore, raised its EV 2W penetration forecast to 22 per cent by FY30 against 19.6 per cent earlier. This implies a 45 per cent EV penetration for scooters.

Nomura said the two-wheeler industry’s EV penetration is progressing faster than its expectation and even that is under-represented by 20 per cent due to a lack of supply. Improving product offerings, higher consumer acceptance and supportive policy, and favourable total cost of ownership (TCOs) are key enablers for the inflection in EV penetration, it said.

Along with strong growth, Ather’s premium positioning keeps long-term margin potential in the range of 15-20 per cent, Nomura said as it believes Ather’s premium valuation at 5-7 times EV/sales should sustain. It valued Ather at an unchanged 5.5 times estimated FY29 EV/sales to arrive at a revised target of Rs 1,926 from Rs 1,714 earlier.

Calling Ather as its top pick in the 2Ws space, Nomura raised its FY28-29 volume estimates for Ather to 7,94,000, up 104 per cent YoY.

"We now expect strong 54 per cent/100 per cent/31 per cent revenue growth over FY27F, FY28, FY29 (54 per cent/80 per cent/31 per cent earlier) – an increase of 10-11 per cent," it said.