Buy Ather Energy; target of Rs 2050: ICICI Securities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • E2W industry inflection point: Favourable Total Cost of Ownership (TCO) vs. ICE counterparts, government incentives, and new model launches are driving electrification in the 2W industry.
  • Ather's competitive advantage: In-house R&D, pioneering industry-first features, and AtherStack, its proprietary software layer, support premium positioning and drive competitive advantage.
  • Capacity expansion and volume growth: Ather's capacity expansion plans, including the new greenfield expansion AURIC, are expected to support volume growth, with a projected 55% CAGR over FY26-29E.
  • Financial performance: Expected revenue growth of 55% CAGR over FY26-29E, with Ather turning EBITDA and PAT-positive on a full-year basis in FY28E.

Thesis Validation Checklist

  • E2W penetration: Monitor E2W penetration, expected to reach 23% by FY31, driven by favourable TCO, capacity expansion, and new model launches.
  • Ather's market share: Track Ather's market share, expected to expand to 21.5%/23.5% in FY29E/FY40E, driven by strategic distribution expansion and new product launches.
  • Konarc's performance: Watch for Konarc's volume ramp-up and market response, as it is expected to anchor Ather's next leg of growth.
  • Margin expansion: Monitor Ather's margin expansion, driven by operating leverage, cost savings, and a growing software and accessories business.