Ather Energy Shares Extend Rally After First Quarterly Profit; Brokerages Raise Growth Expectations

Ather Energy shares continued their upward momentum on October 27 after the electric two-wheeler manufacturer reported its first quarterly net profit, prompting renewed optimism about its financial performance and expansion plans.

The stock gained nearly 5% during Tuesday’s trading session, extending its rally following the company’s September-quarter results. The latest gains came after a sharp rise in the previous session, when investors reacted positively to Ather’s turnaround from a substantial loss a year earlier.

Brokerage assessments, improved operating performance and expectations of rising electric two-wheeler adoption have brought the company back into focus. However, analysts’ price targets remain estimates rather than guarantees of future returns.

Ather Energy Reports First Quarterly Profit

Ather Energy reported a consolidated net profit of ₹1.26 crore for the second quarter of financial year 2026–27, compared with a net loss of ₹154.07 crore in the corresponding quarter of the previous year.

The result marked a significant improvement for the electric scooter manufacturer, which has been working to expand sales while improving margins and controlling costs.

Revenue from operations rose approximately 62.8% year-on-year to ₹1,464 crore in the September quarter, compared with ₹899 crore a year earlier.

The company also recorded positive earnings before interest, taxes, depreciation and amortisation (EBITDA) of ₹11.3 crore, reversing an EBITDA loss of ₹133 crore in the year-ago period. Its adjusted gross margin improved by 160 basis points to 24%.

The improvement came despite pressure from higher prices of commodities such as aluminium, copper, lithium and crude-linked plastics. Ather attributed the stronger performance to product mix, pricing decisions and operational measures.

Why the Stock Is Rising

Investors responded positively to the combination of higher revenue and a return to profitability. The results suggest that Ather is making progress towards improving the economics of its electric scooter business.

The company has benefited from growing demand for electric two-wheelers, an expanding product portfolio and efforts to strengthen its presence beyond its traditional southern Indian markets.

Its Rizta scooter has helped broaden its customer reach, while new products and platforms are intended to attract additional buyers.

The stock’s movement also reflects expectations that improved manufacturing scale and better cost management could support further margin expansion. Nevertheless, a single profitable quarter does not establish that profitability will continue, particularly in a competitive industry requiring substantial investment.

Brokerage Views and Price Targets in Focus

Brokerage commentary has added to market interest following the results. Analysts have been evaluating Ather’s growth prospects in light of stronger sales, improving margins and its plans to expand production.

Nomura had previously maintained a Buy rating and raised its target price to ₹1,926 per share in September, citing faster-than-expected electric two-wheeler adoption and the company’s product pipeline.

BOB Capital Markets also initiated coverage with a Buy rating and a target price of ₹1,680 in October, highlighting Ather’s expansion beyond southern India and its production plans.

These targets were published before the latest quarterly results and should not be interpreted as guaranteed outcomes or as confirmation that every brokerage has revised its estimates following the earnings announcement.

Ather’s valuation remains an important consideration. After its recent rally, the share price has already incorporated some expectations of improved financial performance, meaning any disappointment in future earnings or sales growth could affect investor sentiment.

Manufacturing Expansion to Support Future Demand

Ather’s board has approved capital expenditure of approximately ₹122 crore, including taxes, to expand production capacity at its Hosur facility in Tamil Nadu and its upcoming Factory 3.0 in Chhatrapati Sambhajinagar, Maharashtra.

The proposed expansion is expected to increase annual manufacturing capacity at Hosur from 420,000 vehicles to 495,000. At Factory 3.0, planned annual capacity is set to rise from 500,000 to 650,000 vehicles.

The investment reflects the company’s intention to prepare for higher demand while broadening its manufacturing footprint.

Chief executive and co-founder Tarun Mehta has said demand more than doubled year-on-year during the quarter. The company also expects its Konarc product range to help reach a wider customer base.

What Investors Will Watch Next

Ather Energy’s return to quarterly profitability represents an important milestone, but sustaining that performance will be the next challenge.

Investors will be watching revenue growth, vehicle sales, operating margins, commodity costs and the pace at which new manufacturing capacity is utilised. Competition from established two-wheeler manufacturers and other electric vehicle companies will also remain a key factor.

The recent rally reflects optimism about Ather’s financial turnaround and long-term growth opportunities. Whether the momentum continues will depend on the company’s ability to convert rising demand and increased production capacity into consistent profits.