Ather Energy ended FY26 with stronger volumes, better margins and sharply lower losses, bringing the electric two-wheeler maker closer to EBITDA profitability.
The company sold 2.63 lakh units during FY26, a 69% increase from the previous year. Total income rose 66% to Rs 3,823 crore.
Growth accelerated in the March quarter.
During Q4 FY26, Ather sold 83,000 units, up 76% year-on-year and 23% sequentially. Total income for the quarter stood at Rs 1,214 crore.
With scale improving, attention has shifted from demand to profitability.
EBITDA Losses Continue To Narrow
Ather’s EBITDA losses have reduced sharply over the past year.
- FY25 EBITDA margin: -23%
- FY26 EBITDA margin: -6.7%
- Q4 FY26 EBITDA margin: -2.5%
The annual EBITDA margin improved by 1,630 basis points.
Quarterly performance also showed steady progress.
| Period | Total Income | Adjusted Gross Margin | EBITDA Margin |
|---|---|---|---|
| Q2 FY26 | Rs 940 crore | Rs 210 crore (22%) | Below -10% |
| Q3 FY26 | Nearly Rs 1,000 crore | Rs 251 crore | Around -3% |
| Q4 FY26 | Rs 1,214 crore | 25% | -2.5% |
Management has not provided a timeline for turning EBITDA positive.
However, during the Q2 FY26 earnings call, it said the existing portfolio should be sufficient to put the business on a sustainable path. The upcoming EL platform was described as a growth opportunity rather than a product needed for survival.
Rizta Drove Volume Expansion
The launch of Rizta changed the scale of Ather’s business.
By Q4 FY26, Rizta accounted for almost three-fourths of total sales.
The scooter helped Ather move beyond the premium segment and target the larger family scooter market.
That success encouraged faster retail expansion.
Network growth during FY26 included:
- Experience centres increasing from 351 to 700
- Service centres rising to 548
Growth Spread Beyond South India
Ather’s market share improved across regions.
Middle India, comprising Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra and Odisha, recorded the sharpest gains.
Market share changes were:
- Middle India: from about 4% to 17.3%
- Rest of India: from under 4% to around 12%
- South India: from 13% to roughly 23%
Overall market share reached 18.6% in Q4 FY26.
Gross Margins Improved
Adjusted gross margin rose during the year.
- FY25: 19%
- FY26: 24%
- Q4 FY26: 25%
Without incentives, margins improved from 12% to 21%.
Management attributed the gains to:
- Lower cost of goods sold
- Product redesign
- Engineering improvements
- Use of LFP battery technology
The company said cost of goods sold declined by about 9% during the year.
Software Revenue Is Becoming More Important
Non-vehicle revenue emerged as another driver of margins.
In Q3 FY26, non-vehicle revenue accounted for 14% of total revenue.
Software products contributed a significant portion of that business.
Management said around half of non-vehicle revenue comes from ProPack subscriptions.
Adoption rates remained high.
- AtherStack attach rate in Q2 FY26: 89%
- ProPack attach rate in Q4 FY26: 93%
The software package includes:
- Find My Scooter
- Theft and tow alerts
- Google Maps
- AutoHold
- Traction control
- Magic Twist
Software revenue typically carries higher margins than vehicle sales.
Operating Leverage Helped
Management said nearly three-fourths of costs below gross margin are fixed.
As volumes increased and margins improved, operating leverage contributed significantly to lower EBITDA losses.
The company believes continued growth in Rizta and the 450 portfolio, along with controlled expenses, can support further improvement.
EL Platform And Factory 3.0 Form Next Growth Phase
Ather plans to commercialise the EL platform before the end of the year.
The platform targets a segment where the company currently has no presence, reducing the risk of cannibalisation.
Management said EL has been designed with a better cost structure than the existing 450 and Rizta platforms.
Another expansion project is Factory 3.0 in Chhatrapati Sambhajinagar.
Planned capacity includes:
- Phase 1: 5 lakh units
- Phase 2: 5 lakh units
- Total capacity: 10 lakh units
Phase 1 is expected to begin operations in Q3 FY27.
The plant will have higher vertical integration, including:
- Battery pack assembly
- Transmission assembly
- Painting
- Electronics assembly
- CED coating
The facility is also expected to improve logistics efficiency as Middle India and North India become larger markets.
Commodity Risks Persist
External challenges remain.
During FY26, Ather faced pressure from:
- Rare earth magnet shortages
- Higher memory prices
- Lithium-ion battery inflation
In Q2 FY26, supply disruptions forced changes in sourcing and delayed subsidy claims.
Management estimated:
- Unfiled subsidies of around Rs 20 crore
- EBITDA impact of Rs 20-25 crore
The company also warned in Q4 that commodity inflation could pressure margins.
Price increases, software revenue, accessories and sourcing initiatives may help offset some of the impact, though not completely.
Profitability Appears Closer
Compared with a year ago, Ather’s position has improved considerably.
The company has:
- Sold 2.63 lakh units in FY26
- Expanded to 700 experience centres
- Increased Q4 market share to 18.6%
- Raised adjusted gross margin to 25%
- Reduced EBITDA losses to 2.5%
While EBITDA breakeven appears within reach, net profitability may take longer because of depreciation, interest costs and investments linked to capacity expansion.
For Ather, profitability is no longer a distant target. It has become the next milestone.
TL;DR
Ather Energy reduced its EBITDA loss to 2.5% in Q4 FY26 as volumes, margins and software revenue improved. While PAT profitability may take longer, the EV maker appears much closer to EBITDA breakeven than it was a year ago.
AI summary
- Ather sold 2.63 lakh units in FY26, up 69%.
- EBITDA margin improved from -23% in FY25 to -2.5% in Q4 FY26.
- Rizta accounted for nearly three-fourths of sales in Q4.
- Experience centres doubled to 700 during FY26.
- EL platform and Factory 3.0 are expected to drive the next phase of growth.
