Ather Energy shares soared 18%: Targets by CLSA, JPMorgan, HSBC | Multibagger stock

Multibagger stock Ather Energy Ltd rallied 18 per cent in Tuesday's trade to hit record high after a handful of brokerages have 'Buy' rating on the stock following narrowing of losses in the June quarter.

Nomura suggested the highest target of Rs 1,714 on Ather Energy. Ambit Capital's target of Rs 1,398 was the lowest, Bloomberg data compiled by Business Today on nine brokerages suggested.

"Ather remains our top pick in the EV 2W space. We continue to believe that EV penetration in India is at an inflection point. We estimate that current demand is much higher than supply. We expect the upcoming EL platform to expand TAM by 2 times and also lower costs meaningfully. Margin risks are behind us," Nomura said.

Ather Energy is a consensus 'Buy' with 13 'Buy' recommendations and nil 'Sell' call. The consensus target price of Rs 1,506.60 on the stock, however, suggests a mere 3.9 per cent upside for the counter, thanks to Tuesday's sharp rally.

On Tuesday, Ather Energy rose 17.81 per cent to hit a record high of Rs 1,500 apiece. The multibagger stock has risen 328 per cent from its 52-week low of Rs 349.90 hit last year.

Ather Energy's consolidated net loss for the quarter narrowed to Rs 51 crore from Rs 178 crore a year ago on structural improvements in business and scale up in volumes. Ather Energy's consolidated total sales rose 87.2 per cent YoY to Rs 1,260 crore, up 87.2 per cent YoY, driven calibrated pricing actions and a growing contribution from non-vehicle revenue. Revenue from software subscriptions, charging, accessories, spares, and service rose to 14 per cent of revenue from operations, up from 13 per cent YoY.

CLSA suggested 'Accumulate' on the stock with a target of Rs 1,600. Emkay Global also has a target of Rs 1,600 on Ather Energy, but with 'Buy' rating.  JPMorgan's target for Ather Energy stands at Rs 1,570, Nirmal Bang's target at Rs 1,538, Axis Capital's at Rs 1,480 and HSBC's Rs 1,450.

Nirmal Bang said Ather's demand continued to significantly outpace supply, with dealer inventory reducing to just three days against 14 days in Q4. The management estimating 13,000–15,000 units per month of unrealised retail demand.

"Industry EV penetration continued to improve, with E2W penetration reaching 11 per cent and electric scooter penetration exceeding 25 per cen, while industry registrations grew 68 per cent YoY in Q1FY27. Ather's enquiries rose 95% YoY , pre-orders increased 158 per cent YoY, and retail registrations grew 102 per cent YoY, lifting E2W market share to 16.8 per cent," Nirmal Bang said.

Following the 560 basis points commodity hit in Q1, the management expects only a further 100–200 bps of incremental cost pressure, which it believes can be largely offset through already-announced price hikes, EL platform-led cost efficiencies and annual cost reductions.

Nirmal Bang said the key growth catalysts remained the EL platform launch on Aug 29 and the subsequent AURIC Phase 1 ramp-up in Q3FY27, increasing installed capacity, while Phase 2 will support medium-term growth.

"We retain BUY on Ather and increase our target by 19 epr cent to Rs 1,600 from Rs 1,350, at 7 times June 2028E EV/S (like Eicher Motor's implied 7.5 times EV/S for Royal Enfield in its FY13-17 high-growth phase)," Emkay Global said.