According to co-founder and CEO Tarun Mehta, electric two-wheel energy is hoping to continue improving EBITDA margins, backed by the volume of the new scooter model, Ritza.
“The company currently has the ability to add retailers as Ritza contributes to a large portion of its sales,” Mehta said. The company is betting on expanding its retail footprint as it grows its product portfolio to enhance its path to profitability.
Ather’s strong volume momentum is already beginning to reflect financial performance. The company’s adjusted total margins have improved sharply from 9% in the six months ended December 31, 2023 to 19% in the same period in 2024. At the same time, Ather reduced the EBITDA loss margin to 23%.
Strategic Cost Initiatives
EV manufacturers are also implementing strategic cost initiatives to support further increased margins. They have moved from traditional NMC batteries to inexpensive LFP (lithium iron phosphate) batteries, and for that scooter, they have moved to low-cost EL platforms. The move Mehta said will help to increase profitability in the medium term.
With its lucrative unit economics, a rising sales base and a growing product pipeline, Ather is actively positioned to compete in India’s fast-growing electric motorcycle market.
With the IPO on the market on Monday, Ather will become the second electric motorcycle company to be released after Ola Electric. The company plans to raise approximately 2,626 crore through new issuances of shares. The issue also includes offers to sell from promoters and existing shareholders. Except for allocation to new manufacturing hubs and R&D initiatives, 300 crores will be used for 40 crores for marketing initiatives and debt repayments.
As of Friday, the company had raised 1,340 crores from anchor investors. Anchor investors include Franklin Offshore, Abu Dhabi Investment Bureau, Société General, BNP Paribas, Morgan Stanley, SBI Mutual Fund, Invesco MF, ICICI Prudential Mutual Fund, Aditya Birlassanlife, Helios Investment, East Spring Mutual Sanflue Tata Investment Corporation, and Union Innovation & Opportunities.
(Input from BusinessLine Intern Nethra Sailesh)
Released on April 26, 2025
