Ather Energy Limited

Consumer Cyclical — Auto Manufacturers · NSE

₹1,470.00₹0.00 (0.00%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, the company is currently loss-making.

In simple words: The company is currently losing money, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Ather Energy Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Ather Energy Limited, an electric vehicle company, engages in the design, development, and sale of electric two-wheelers, and associated product ecosystem.

IndustryAuto Manufacturers

SectorConsumer Cyclical

Annual revenue₹3,663 Cr

How does it make money?

Turns over ₹3,663 Cr a year. Of every ₹100 of sales, about ₹-14 reaches shareholders as profit, with ₹-8 left at the operating level before interest, tax and depreciation.

EBITDA margin-7.8%

Net margin-14.1%

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TATA MOTORS LIMITED, TATA MOTORS PASS VEH LTD, MAHINDRA & MAHINDRA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TATA MOTORS LIMITEDP/E 37.1x · ROE 32.8%

TATA MOTORS PASS VEH LTDP/E — · ROE -3.0%

MAHINDRA & MAHINDRA LTDP/E 17.8x · ROE 19.7%

What is its competitive advantage?Little sign of one

Returns on capital of -13.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE-13.4%

ROE-20.1%

Peer median ROE19.7%

What is the outlook?

12 analysts covering the stock expect revenue to grow about 59.9% and earnings to grow about 115.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+59.9%

Est. earnings growth+115.5%

Analysts12

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +106% while net margin moved -71% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+106%

Margin effect-71%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ No meaningful P/E — the company is lossmaking
✗ P/B of 21.87x is a steep premium to book

Quality vs. Valuation

Company Quality

56/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

21/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

21.87x

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -38.8% to -7.8% over 3 years.
Return on equity is rising
ROE has improved from -140.9% to -20.1%.
Return on capital is rising
ROCE has improved from -83.7% to -13.4%.
Very low debt
Debt/Equity of 0.26x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 592% against revenue growth of 106% — customers are taking longer to pay.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -6.3x — little room if earnings dip.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹517 Cr in the latest reported year.
🔴Receivables growing faster than salesFinancial
Receivables up 592% against revenue up 106% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -6.7x to -6.3x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -38.8% to -7.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 592% against revenue up 106%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 20% a year✓ 27.2% CAGR
Latest reported year was 88.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -10%✓ -7.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹474 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -6.3x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ -13.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 2 neutral · 6 weak

Market Cap

₹58,318 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

21.87x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹-10.17

Loss-making

Negative earnings per share — the business is losing money

ROE

-20.1%

Weak

Weak capital efficiency

ROCE

-13.4%

Weak

Low return on total capital employed

Debt/Equity

0.26x

Low

Conservative leverage

Revenue Growth (YoY)

88.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

36.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹474 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,470

P/E (Forward)

925.3x

Operating Margin

-5.9%

Weak

Thin margins leave little room for error

Net Margin

-9.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.42

Comfortable

Healthy short-term liquidity

52W Range Position

76%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1476.5 / 1519.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,780 Cr	₹1,751 Cr	₹2,251 Cr	₹3,663 Cr	+27.2%
EBITDA	-₹691 Cr	-₹662 Cr	-₹556 Cr	-₹286 Cr	—
EBITDA Margin	-38.8%	-37.8%	-24.7%	-7.8%	—
PAT (Net Profit)	-₹865 Cr	-₹1,060 Cr	-₹812 Cr	-₹517 Cr	—
EPS	₹-23.21	₹-28.45	₹-21.81	₹-13.99	—
ROE	-140.9%	-194.1%	-164.8%	-20.1%	—
ROCE	-83.7%	-116.3%	-76.2%	-13.4%	—
Total Debt	₹672 Cr	₹478 Cr	₹619 Cr	₹664 Cr	-0.4%
Free Cash Flow	-₹1,003 Cr	-₹384 Cr	-₹1,060 Cr	-₹474 Cr	—

🟢 Revenue has grown at 27.2% a year over 3 years.

🟢 EBITDA Margin has risen from -38.8% to -7.8% over 3 years (+31.0 pts).

🟢 ROE has risen from -140.9% to -20.1% over 3 years (+120.8 pts).

🟢 ROCE has risen from -83.7% to -13.4% over 3 years (+70.3 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.4% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,722 Cr

Total Liabilities

₹2,149 Cr

Total Debt

₹664 Cr

Cash & Equivalents

₹112 Cr

Operating Cash Flow

₹32 Cr

Capex

-₹506 Cr

Shareholding (proxy)

Institutional Holding

25.1%

Insider Holding

50.6%

Analyst Consensus

Recommendations

12 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,696.33

+15.4% vs CMP

Target Range

₹1,010 – ₹2,200

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TATA MOTORS LIMITED	37.1x	32.8%
TATA MOTORS PASS VEH LTD	—	-3.0%
MAHINDRA & MAHINDRA LTD	17.8x	19.7%

Recent News

3 mixed3 general

Ather Energy Share Price News: Valuation and Sector View

Univest, 13 Oct

EV 2Ws industry established now, can do without subsidies: Ather

BusinessLine, 26 Sept

'Consensus Buy': Ather Energy shares gain after Bank of America sees stock at ₹1,900

CNBC TV18, 22 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Tesla Delivery Beat Lifts Ather Energy Stock And EV Shares Back Into View

Simply Wall Street, 04 Oct

Ather Energy Share Price Surges 14% After Stellar Q1 FY27 Performance

India Infoline, 04 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

EV stock to buy: Ather Energy shares - 130% returns in a year, Bank of Baroda Caps sees 19% more upside | Target price

Livemint, 11 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate10.9/20

🟢GrowthStrong18.4/20

🔴ProfitabilityWeak5/15

🔴ValuationDemanding2.6/15

🔴RiskHigh4.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 20% a year27.2% CAGR
✓EBITDA margin holds above -10%-7.8%
✗Free cash flow remains positive-₹474 Cr
✗Interest cover stays above 3x-6.3x
✗ROCE stays above 8%-13.4%