Q1 2027 Ather Energy Ltd Earnings Call Transcript
Key Points
- Strong demand surge with E2W industry penetration up 44% and Ather pre-orders up 158% year-over-year, reaching 1.5 lakh units.
- Retail registrations grew 102% YoY, outpacing wholesale growth of 81%, indicating robust consumer pull.
- Achieved first-ever positive EBITDA quarter of INR 9 crore (0.8% margin) despite commodity headwinds, driven by disciplined fixed cost management.
- Average selling price (ASP) increased to INR 1.61 lakh from INR 1.5 lakh, reflecting strong pricing power and improved SKU mix.
- Ather Stack Pro attach rate remained high at 94%, contributing to non-vehicle revenue growth to 14% of operating revenue.
- Capacity expansion on track with Aurangabad Phase 1 (5 lakh units) expected to go live later this year, and Phase 2 potential to add another 5 lakh units.
- Successful fundraise of INR 2,500 crore (QIP and preference issue) to support capacity expansion and product launches.
- New EL scooter platform under production with high-volume trials begun, expected to drive further demand and cost reductions.
- Dealer channel inventory reduced to just 3 days, indicating strong sell-through and healthy channel health.
- Middle India retail growth of 141% YoY, highlighting successful geographic expansion.
- Commodity cost escalation continued, with a 5.6% drop in adjusted gross margin to 22.4% in Q1 FY27.
- Production constraints and supply chain challenges (labor crisis, West Asia war) limited volumes, with April production soft at 24,000 units.
- Unrealized retail potential of 13,000-15,000 units per month due to capacity constraints, leading to long waiting times (up to 2 months) and dealers pausing pre-orders.
- PME Drive subsidy uncertainty persists, with no clarity on extension, and 15-20% of Q1 sales were without subsidy.
- Further commodity inflation risk remains, with potential additional 100-200 bps hit in coming quarters.
- Auric Phase 1 ramp-up may spill into early FY28, and Phase 2 investment decisions are still pending, creating near-term supply uncertainty.
- EL scooter launch may depress ASPs, though margins are expected to remain stable.
- New store openings were slowed in Q1 due to supply constraints, potentially impacting long-term network expansion.
- Motorcycle segment entry is delayed, with Ather likely to be a follower rather than pioneer, potentially missing early market opportunities.
- Fixed costs are expected to rise as Auric goes live, though some may be capitalized, but could pressure margins in the medium term.
Ladies and gentlemen, good day and welcome to the Ather Energy Limited Q1 FY27 results conference call.
(Operator Instruction)
I will now hand the conference over to Mr. Murali Sashidharan, Head of Communications at Ather Energy.
Thank you, and over to you, sir.
Thank you.
Good evening, everyone, and welcome to Ather Energy Limited Q1 FY27 earnings conference call.
From the management team, we have with us today Mr. Tarun Mehta, Executive Director and Chief Executive Officer, and Mr. Sohil Parekh, Chief Financial Officer.
Before we begin, Let me draw your attention to the fact that today's discussions may include certain forward-looking statements which are predictions, projections or other estimates about future events.
These statements reflect management's current expectations about future performance of the company and are subject to various risks and uncertainties that may cause actual results to differ materially.
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