Buy Ather Energy Ltd for the Target Rs 2,200 by Emkay Global Financial Services Ltd
We attended Ather's Annual Community Day (ACD), which showcased the launch of Ather’s Konarc e-scooter (based on Ather’s new EL Platform). We opt to play the E-2W theme via Ather (Yet another mega shift in motion; Ather the frontrunner), given its established brand and product, robust GM, and sharegain potential on EL platform scale-up. We retain BUY and raise TP by ~38% to Rs2,200 from Rs1,600, at 7x Sep-28E EV/S (like EIM’s implied 7.5x EV/S for RE in its FY13-17 high-growth phase). We also believe Ather’s stock price can potentially double even from current levels over the next 3-4Y. KTAs from the event:
1) ACD, with a massive turnout of >5K attendees—customers/fans) showcased Ather’s brand strength/cult following.
2) EL platform is a lower-cost and more optimized/versatile platform which can support multiple formats.
3) Konarc is the first of many products based on EL platform, with a familiar ICElike form-factor (higher comfort/durability).
4) Konarc showcases several clever customer-oriented features (eg air walk) backed by solid engineering, which support Ather’s attempts to eliminate adoption barriers and drive mass EV adoption.
5) EL Platform’s BOM is 10-12% cheaper, but an ASP drop is not expected as Konarc addresses customer needs and affordability with its presence across price points.
6) Ather's pricing philosophy is to lower prices only by reducing its cost structure rather than stripping away features to avoid brand/quality dilution.
7) AURIC to scale up from 3Q/4Q with full ramp up by 1HFY28 (incremental 42k/mth units a step jump); Konarc’s production to start from Hosur (delivery from Sep-26), lowering initial dependence on AURIC; Ather indicated a further 6-10k/mth units capacity expansion at Hosur as it can currently cater to only 50% of the demand (3-4M order backlog).
8) Ather highlighted multiple new formats based on the EL platform going ahead and is also likely to unveil the motorcycle platform in FY28.
Other key takeaways from ACD
1) Konarc is built on 3 key pillars: smoothness (direct transmission with a swing-armmounted motor), design (ICE-like form factor to catalyze EV adoption), and sophistication (keyless initiation and boot access).
2) Ather sees North India as its priority market following FY26, the year of Middle India, which grew 146% yoy and views Konark as the right candidate to deliver disproportionate gains, rolling out from the North all the way to the South, with the aim of making EVs mainstream by addressing key adoption barriers.
3) Konarc is not just a mass-market product; it addresses customer needs while tackling affordability through the first 100 km variant at Rs100k, and with it, Ather enters a price point where it was absent, targeting clients who previously could not find an appropriate EV option.
5) Ather will begin scaling up Konarc, having delinked its launch from the AUIRC plant to reduce dependence, production commencing from Hosur; the Hosur plant is fungible across the 450/Rizta/Konarc, while AURIC remains on track to start production from 3Q/4Q; Ather is also trying to increase Hosur's capacity beyond its existing 35k/mth units.
6) Ather's current focus is scooters, followed by e-motorcycles in 2–3Y and then exports (will keep adding 2–3 markets pa; exports to have a major impact over the next 5–7Y).
7) The notion that EVs are an urban phenomenon is not right, as Tier 2/3 cities are performing strongly.
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