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Target: ₹4,800
CMP: ₹884.75
We interacted with the management of Ather Energy and visited its battery pack assembly and vehicle assembly facilities in Hosur, Tamil Nadu. KTAs:
Expanded distribution (about 3.5x by FY25) and new family scooter launch (opens up about 5x addressable market vs current) are likely to drive the next growth phase; capacity to grow to about 1.4 million/year by FY26 vs about 4.3 lakh /year currently.
Subsidy cut has accelerated consolidation in the E-2W industry; Ather is gross margin-positive despite the recent price reduction. Started in 2013, Ather is a Bengaluru-based start-up with about 11 per cent E-2W volume market share (FY24YTD, as per Vahan), addressing the ₹97,000-1.26 lakh price bracket (effective ex-showroom prices, New Delhi). The company would continue to focus on its core business and would not enter cell manufacturing.
We believe Ather would benefit from E-2W consolidation; however, growth in higher price brackets and response to the upcoming family scooter launch would need to be watched. HMCL has 40 per cent stake in Ather (contributes ₹60 to our ₹4,800-SoTP target -(valued at 20 per cent discount to investment value) and upcoming Ola Electric listing potentially poses upside risk of ₹240/share).
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