Nomura retains its ‘Buy’ rating on Ather Energy and raises the target price by 12%, citing faster electric two-wheeler adoption, stronger product offerings and improving earnings prospects

Nomura Raises Ather Energy Target Price

Electric two-wheeler maker Ather Energy has received a positive outlook from global brokerage Nomura, which has retained its ‘Buy’ rating and raised its target price to ₹1,926 from ₹1,714.

The revised target implies an upside of nearly 22 per cent from Ather Energy’s previous closing price of ₹1,583. The brokerage believes accelerating electric vehicle adoption in India's two-wheeler segment, combined with Ather’s expanding product portfolio and technology capabilities, could support further gains in the stock.

Ather Energy shares were trading higher on Thursday, rising around 3.5 per cent to ₹1,637.45 on the BSE during the session.

EV Penetration Rising Faster Than Expected

A key reason behind Nomura’s bullish stance is the faster-than-expected adoption of electric two-wheelers in India.

According to the brokerage, EV penetration in the two-wheeler industry reached 10.7 per cent in August 2026, compared with 7.7 per cent during the same month a year earlier.

Nomura believes reported penetration could still underestimate actual consumer demand by around 20 per cent because supply constraints have limited the availability of electric two-wheelers in some markets.

Improving product choices, greater consumer acceptance, supportive government policies and favourable total cost of ownership are expected to remain important drivers of the transition from internal-combustion-engine vehicles to electric models.

FY30 EV Penetration Forecast Raised

Nomura has increased its forecast for electric two-wheeler penetration to approximately 22 per cent by FY30, compared with its earlier estimate of 19.6 per cent.

The upward revision reflects the brokerage’s assessment that the shift towards electric mobility is happening faster than previously anticipated.

The broader trend towards scooterisation could also support EV adoption, as scooters are particularly suited to urban commuting and have become an important segment for electric mobility companies.

Konarc and New Product Strategy

Ather’s recent product launches are another factor supporting the brokerage’s positive view.

Nomura believes the company's technology-led product strategy, including the launch of the Konarc electric scooter, reinforces its competitive positioning.

The brokerage expects continued innovation and a wider product portfolio to help Ather address different customer segments while maintaining its focus on technology and connected mobility.

The company’s newly launched EL platform is particularly important to the longer-term growth story.

EL Platform Could Expand Ather’s Addressable Market

Nomura estimates that Ather’s EL platform could potentially double the company's total addressable market (TAM) because of its scalable architecture.

The platform could allow Ather to introduce products at more competitive price points while retaining technological differentiation. This could enable the company to move beyond its existing customer base and address a broader section of India's rapidly expanding electric two-wheeler market.

Nomura also believes that the eventual success of Ather’s new motorcycle platform could provide additional upside to its earnings estimates.

Revenue Growth Expectations Strengthen

The brokerage has significantly increased its revenue growth expectations for Ather Energy.

Nomura now forecasts revenue growth of approximately 54 per cent in FY27, 100 per cent in FY28 and 31 per cent in FY29.

Such growth would be supported by rising EV penetration, higher volumes, new product launches and expansion of Ather’s addressable market.

The estimates also suggest that the company is entering a potentially important phase of operating leverage as volumes scale.

EBITDA Margins Expected to Turn Positive

Ather’s profitability trajectory is another major component of the bullish investment case.

Nomura expects EBITDA margins to improve to approximately 7.6 per cent by FY29, compared with an estimated negative 6.2 per cent in FY27.

The brokerage expects Ather to achieve PAT breakeven in FY28, marking a significant transition from its current loss-making position.

Improving gross economics, higher capacity utilisation, scale benefits and greater operating leverage could contribute to the expected margin expansion.

Q1FY27 Loss Narrows Sharply

Ather Energy's latest quarterly performance also showed signs of improvement.

For the June quarter of FY27, the company reported a consolidated net loss of ₹51.09 crore, significantly narrower than the ₹178.23 crore loss recorded in the corresponding quarter a year earlier.

Wholesale volumes increased 81 per cent year-on-year to 83,173 units, indicating strong growth in vehicle demand and distribution.

The improvement in both volumes and losses provides a stronger base for Nomura’s expectation of a gradual move towards profitability.

Stock Has Outperformed the Broader Market

Ather Energy has delivered substantial gains for investors in 2026.

The stock has more than doubled during the year, rising around 121 per cent, while the benchmark Nifty 50 has declined about 10.3 per cent over the same period.

On a one-year basis, Ather Energy shares have surged approximately 202 per cent, reflecting the market’s increasing optimism about India's EV growth story and the company's ability to scale.

However, the sharp rally also means that expectations around future growth and profitability are already high, making execution and volume growth critical for sustaining the valuation.

Key Risks for Investors

Despite Nomura’s bullish stance, Ather Energy remains exposed to several risks.

The company operates in a highly competitive electric two-wheeler market where established automobile manufacturers and other EV-focused players are expanding rapidly. Pricing competition, battery costs, charging infrastructure and changes in government incentives could influence industry economics.

Execution risk is another important factor. Ather needs to successfully scale production, expand its market presence and convert strong volume growth into sustainable profitability.

The stock’s substantial appreciation also increases valuation sensitivity. Any disappointment in sales growth, margins or the pace of the expected FY28 profitability turnaround could result in increased volatility.

Market Outlook

Nomura’s revised ₹1,926 target reflects a constructive view on Ather Energy’s long-term growth prospects, supported by faster EV penetration, new product launches and the potential expansion of its addressable market through the EL platform.

The expected transition towards EBITDA profitability and PAT breakeven by FY28 could become an important catalyst if Ather delivers on its growth targets.

For investors, the key variables to watch will be EV penetration, monthly volumes, market share, product acceptance, EBITDA margins and the pace of the profitability turnaround. While the long-term EV opportunity remains attractive, the stock’s sharp gains make disciplined valuation assessment and monitoring of execution particularly important.