Ather Energy expects to continue improving its EBITDA margins, on back of rising volumes
Ather Energy’s EBITDA Margins Set to Improve with Ritza Success and IPO Launch
Key Highlights
- EBITDA loss margin reduced to 23% from 34% year-over-year
- Gross margin improved from 9% to 19% in six months
- IPO to raise ₹2,626 crore through fresh share issuance
- ₹1,340 crore already raised from anchor investors
Strong Growth Momentum with Ritza
Ather Energy, a leading electric two-wheeler manufacturer, is experiencing significant growth driven by the success of its new scooter model, Ritza. According to Co-founder and CEO Tarun Mehta, the company’s improving EBITDA margins are directly linked to rising sales volumes and strategic expansion initiatives.
Retail Expansion Strategy
The success of the Ritza model has enabled Ather Energy to accelerate its retail expansion plans. The company is strategically growing its retail footprint while simultaneously expanding its product portfolio, creating a robust foundation for sustainable profitability.
Financial Performance Highlights
The company has demonstrated remarkable financial improvement:
| Metric | 2023 (H2) | 2024 (H2) |
|---|---|---|
| Adjusted Gross Margin | 9% | 19% |
| EBITDA Loss Margin | 34% | 23% |
Strategic Cost Optimization
Ather Energy is implementing several strategic initiatives to enhance margin expansion:
- Transitioning from traditional NMC batteries to cost-effective LFP (lithium iron phosphate) batteries
- Implementing a new lower-cost EL Platform for scooter production
- Optimizing manufacturing processes for improved efficiency
- Strengthening the supply chain for better cost management
IPO Launch and Future Growth
As Ather Energy prepares to become the second electric two-wheeler company to go public after Ola Electric, it has announced comprehensive plans for its IPO proceeds:
- Total fundraising target: ₹2,626 crore through fresh share issuance
- Marketing initiatives allocation: ₹300 crore
- Debt repayment: ₹40 crore
- Remaining funds: New manufacturing hub and R&D initiatives
Strong Investor Confidence
The company has already demonstrated strong market confidence by raising ₹1,340 crore from prominent anchor investors, including:
- Global financial institutions: Franklin Offshore, Abu Dhabi Investment Authority
- International banks: Societe Generale, BNP Paribas, Morgan Stanley
- Domestic mutual funds: SBI Mutual Fund, Invesco MF, ICICI Prudential Mutual Fund
- Investment corporations: Tata Investment Corporation, Union Innovation & Opportunities
Market Position and Future Outlook
With its strong unit economics, expanding sales base, and growing product pipeline, Ather Energy is strategically positioned to capitalize on India’s rapidly growing electric two-wheeler market. The company’s focus on technological innovation, cost optimization, and retail expansion creates a solid foundation for sustained growth and market leadership.
About The Author
