- Ather Energy lost 13,000-15,000 monthly sales in Q1 due to production capacity constraints
- New Aurangabad plant will raise annual capacity to 9.2 lakh units, with Phase 2 planned
- Ather will unveil its new EL scooter brand at the August 29 Community Day event in Bengaluru
Ather Energy shares rallied 18% on Tuesday after the company reported its first-ever EBITDA-positive quarter alongside a sharp acceleration in demand that has left production struggling to keep pace.
The company posted an EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin of 0.8% for Q1 FY27, its first positive quarter since listing, even as commodity costs rose 46% over the last five quarters and squeezed gross margins by 5.6 percentage points. Wholesale volumes grew 81% year-on-year to 83,000 units, while adjusted gross margin came in at 22.4%, down from 25.4% in Q4 FY26. Average selling price rose to Rs1.61 lakh from about Rs1.5 lakh a quarter earlier, helped by price hikes and stronger SKU mix.
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But the bigger story to emerge from the earnings call was how far ahead demand has run of Ather's ability to supply it.
Executive Director and CEO Tarun Mehta said the company estimates it lost out on 13,000-15,000 units of sales every month in the June quarter simply because it did not have the capacity to produce more. "We believe today that of the 30,000 units that we retail average in Q1, we could have probably sold an incremental 13,000 to 15,000 units extra every month. That's the unrealised retail potential for us," Mehta said.
Ather Energy has delivered a strong Q1 performance
Photo Credit: NDTV Profit
He described the situation as "a bittersweet situation to be in because obviously a brand would want to be in a place where they have more demand than they can satiate," pointing to dealer inventory falling from 14 days to just three days over the quarter.
Pre-orders, which are paid bookings captured nationally, jumped 158% year-on-year to a record 1.5 lakh in the quarter, even as dealers in several states stopped accepting fresh orders altogether. "This is 50,000 pre-orders despite the fact that in many states now our dealers are no longer even accepting new pre-orders because the waiting times are now hitting two months or even higher," Mehta said. Daily inquiries rose 95% year-on-year, with more than 7 lakh logged in the quarter.
Production climbed steadily through the quarter — from 24,000 units in April to 28,000 units in May and 31,000 units in June — with the company's Hosur plant now running close to its 35,000-unit monthly ceiling. "I'm happy to announce that we are almost at 100% utilisation as we speak now. So the ramp up took a couple of months, but we are now there," Mehta said.
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To close the gap, Ather is racing to bring its new Aurangabad plant on stream. Phase 1 will lift annual capacity to 9.2 lakh units from 4.2 lakh units later this calendar year, with a possible Phase 2 that could take total capacity to 14.2 lakh units. Even that may not be enough, Mehta cautioned. "9.2 lakh units per annum is only 77,000 units a month. We believe on current demand trajectories even this may be tight in the coming quarters," he said.
The company has raised Rs2,500 crore in total — a Rs1,300 crore QIP already closed and a Rs1,200 crore preference issue awaiting shareholder approval — to fund the expansion and potentially fast-track Phase 2.
New store additions have also been deliberately held back. "It is not prudent for us to ship out more inventory to build out new stores while existing stores are only meeting 50%, 60% of demand," Mehta said, adding that store openings will pick up once the Aurangabad plant and the company's upcoming EL scooter platform go live.
**Ather to unveil new EL scooter brand name this week**
Central to closing the demand-supply gap is the imminent launch of Ather's EL scooter platform, for which manufacturing capacity is being scaled up to 60,000 units a month across Hosur and Aurangabad.
"Obviously, it will not be called EL, it will be called — it'll have a brand name. We'll be unveiling the brand name in a couple of days, so please do watch out for it," Mehta said.
The scooter will launch at Ather's annual Community Day event on 29 August in Bengaluru, themed "A New Dawn of Magic." Mehta said the rollout will initially lean towards Middle India and northern markets, a reversal of the sequencing used for the Rizta launch, which prioritised Middle India first.
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