HDFC Securities Initiates ‘Buy’ Rating on Ather Energy with INR 409 Target
EV Maker Gains Analyst Backing as Market Expansion, Product Focus Fuel Optimism
HDFC Securities has initiated coverage on Ather Energy with a ‘Buy’ rating and a target price of INR 409, representing a potential 30% upside from its last closing price as of June 13, 2025, on the BSE.
Market Response and Recent Performance
Following the bullish call, Ather’s stock rose 2.32% intraday to INR 320.90, pushing its market capitalisation to INR 11,892.64 Cr with over 5 lakh shares traded.
- Although the stock has gained 1.24% in the last month, it remains down 3.8% since listing on May 6.
- Ather debuted on the BSE at INR 326.05, a 1.57% premium, and opened on the NSE at INR 328, up 2.18% over the IPO price of INR 321.
Growth Outlook and Profitability Path
HDFC’s report underscores Ather’s stable presence as the fourth-largest electric two-wheeler brand, holding a 13.4% market share as of the first five months of CY2025.
- The brokerage anticipates Ather will outpace industry growth thanks to its expanding product lineup, aggressive dealer network expansion, and a rising focus on marketing.
- Ather is expected to turn EBITDA-positive by FY30, with temporary flattening in FY31 due to GST-related gross margin pressures.
- EBITDA margins are forecasted to reach 9.5% by FY40, driven by economies of scale, improved localization, better export traction, and market consolidation.
Margins to Improve With New Battery Tech, Scooters
HDFC anticipates significant margin improvements beginning FY26, attributed to:
- Transition to LFP batteries
- Launch of the new EL scooter platform
- Higher sales of merchandise and accessories
Gross margin projections:
- 16.8% in FY25
- 18.0% in FY26
- 20.0% in FY27
- 21.2% in FY28
The upcoming Rizta scooter, positioned in the affordable segment, is expected to unlock new markets like Gujarat and Maharashtra, while Northern India is now a strategic focus, according to CBO Ravneet Phokela.
Financials Post-IPO and Strategic Direction
In Q4 FY25, Ather reduced its net loss by 17% YoY to INR 234.4 Cr, though losses rose sequentially.
- Operating revenue climbed 29% YoY to INR 676.1 Cr, and 7% QoQ.
- The company is exploring rare earth-free motors to mitigate supply risks and lower production costs.
Founded in 2013 at IIT Madras, Ather is now one of India’s leading EV OEMs, competing with Ola Electric, Bajaj Auto, TVS Motor, and Hero MotoCorp.
- It has raised over $630 Mn from backers such as Hero MotoCorp, NIIF, GIC, and Zerodha’s Kamath brothers.
