Ather Energy shares rise 3% as Nomura raises target price; stock up nearly 200% in 1 year

Ather Energy share prices surged by 3% to hit an all-time high of Rs 1,625 on the BSE on Thursday, following a move by Nomura to increase its target price for the shares. The brokerage firm upgraded its rating on Ather Energy to 'Buy' and raised its target price from Rs 1,714 to Rs 1,926 per share, suggesting a potential 22% upside from the stock's previous closing price of Rs 1,580.

Nomura's analysts stated that the adoption of electric vehicles (EVs) in two-wheelers is accelerating faster than anticipated, with a potential supply shortage contributing to the discrepancy between the firm's forecasts and current realities. Factors such as improved product offerings, greater consumer acceptance, and supportive policies are driving the rapid EV penetration in this sector.

Nomura now projects EV two-wheeler penetration to reach 22% by FY30, up from its earlier estimate of 19.6%, indicating a 45% EV penetration for scooters. The company's introduction of the Konarc platform has reinforced Ather's technological leadership with features like Advanced Electronic Braking System (AeBS), MagicKey, SmartWake, AutoPop, and AirWalk.

This launch is expected to double Ather's Total Addressable Market (TAM), enabling the company to offer its products at competitive prices while maintaining its differentiation. Nomura has also raised its FY28 and FY29 volume estimates for Ather to 7.94 lakh and 10.16 lakh respectively, with revenue growth anticipated at 54%, 100%, and 31% over FY27, FY28, and FY29 respectively.

The company's EBITDA margins are expected to improve, reaching +7.6% by FY29, and Ather is projected to achieve PAT breakeven in FY28. The success of the new motorcycle platform could further boost the company's prospects.