Ather Energy share price rallied 4% in early trade on Thursday, after global brokerage firm Nomura raised its target price on the electric two-wheeler maker and reiterated its bullish view. The EV stock rose as much as 4.00% to Rs 1,646.45 apiece on the BSE.
Nomura maintained its ‘Buy' rating on Ather Energy shares and raised the target price to Rs 1,926 per share from Rs 1,714 earlier. It values Ather Energy at 5.5x FY29F EV/sales.
Ather Energy remains Nomura's top pick in the two-wheeler space, as it believes the faster pace of electric vehicle (EV) adoption strengthens the outlook for the company.
Nomura noted that the EV penetration in the two-wheeler industry is progressing faster than previously expected, supported by improving product offerings, rising consumer acceptance, favourable total cost of ownership (TCO) and supportive government policies.
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Additionally, the brokerage firm expects the success of the new electric scooter, Konarc, can provide further upside to its estimates. It expects the company's EL platform to potentially double its total addressable market (TAM). The platform's scalable architecture should enable Ather to offer products at more competitive price points while retaining its technology-led differentiation.
Ather Energy Estimates Raised
Nomura raised its FY28 and FY29 volume estimates for Ather Energy to 7.94 lakh units and 10.16 lakh units, respectively. It now expects Ather's revenue to grow 54% in FY27, 100% in FY28 and 31% in FY29, with its estimates increasing by 10-11%.
The brokerage firm also expects Ather's EBITDA margin to improve from -6.2% in FY27 to 7.6% by FY29. It expects the company to achieve PAT breakeven in FY28.
The brokerage also sees scope for a sharp improvement in margins in FY29 as the production-linked incentive (PLI) scheme benefits for competitors come to an end in March 2028.
“Along with strong growth, Ather's premium positioning keeps long-term margin potential in the range of 15-20%, in our view. Hence, we believe Ather's premium valuation at 5-7x EV/sales should sustain,” Nomura said.
At 9:30 AM, Ather Energy share price was trading 2.94% higher at Rs 1,629.60 apiece on the BSE.
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