Ather Energy expects to continue improving its EBITDA margins, on back of rising volumes

Electric two-wheeler major Ather Energy expects to continue improving its EBITDA margins, buoyed by the rising volumes of its new scooter model, Ritza, according to Co-founder and CEO Tarun Mehta.

“With Ritza contributing to a large part of the company’s sales, the company now has the ability to add more retail stores,” Mehta said. The company is betting on expanding its retail footprint alongside growing its product portfolio to strengthen its path to profitability.

Ather’s strong volume momentum has already begun to reflect in its financial performance. The company’s adjusted gross margin improved sharply from 9 per cent in the six months ended December 31, 2023, to 19 per cent in the same period in 2024. Simultaneously, Ather narrowed its EBITDA loss margin to 23 per cent , compared to 34 per cent in the previous year.

Strategic cost initiatives

The EV maker is also implementing strategic cost initiatives to support further margin expansion. It is transitioning from traditional NMC batteries to cheaper LFP (lithium iron phosphate) batteries, and shifting to a lower-cost EL Platform for its scooters — moves that Mehta said will help bolster profitability over the medium term.

With favourable unit economics, a rising sales base, and a growing product pipeline, Ather is positioning itself aggressively to compete in India’s fast-growing electric two-wheeler market.

With its IPO hitting the market on Monday, Ather will be the second electric two-wheeler company to go public after Ola Electric. The company plans to raise approximately ₹2,626 crore through a fresh issuance of shares. The issue also comprises offer-for-sale from promoters and existing shareholders. Other than the allocation towards the new manufacturing hub, and R & D initiatives, ₹300 crores will be used for marketing initiatives and ₹40 crores for debt repayment.

As of Friday, the company raised ₹1,340 crore from anchor investors which include Franklin Offshore, Abu Dhabi Investment Authority, Societe Generale, BNP Paribas, Morgan Stanley, SBI Mutual Fund, Invesco MF, ICICI Prudential Mutual Fund, Aditya Birla Sun Life, Helios Mutual Fund, Eastspring Investments, Prudential Hong Kong, Tocu Europe III SARL, Tata Investment Corporation, and Union Innovation & Opportunities.

(With inputs from businessline intern Nethra Sailesh)

Published on April 26, 2025