Buy Ather Energy; target of Rs 2050: ICICI Securities

What happened

ICICI Securities initiated coverage on Ather Energy with a BUY rating and a discounted cash flow based fair value of INR 2,050. The brokerage expects Ather to become EBITDA and PAT positive on a full-year basis in FY28E.

Confirmed

Global impact / market context

A BUY rating with a INR 2,050 target signals the brokerage expects Ather's shares to rise. Expected full-year profitability by FY28E matters because it would show the company can earn money without relying on fading subsidies.

Analyst inference

The report says the electric two-wheeler industry may be at an inflection point, a shift toward faster growth. It also cites the Konarc model opening a new market segment and cost cuts on the EL platform as catalysts.

Analyst inference

What to watch

1. Watch whether Ather turns EBITDA and PAT positive on a full-year basis in FY28E, as ICICI Securities expects, since that marks the shift from losses to profits. Confirmed
2. Track progress toward the projected revenue compound annual growth rate of 55% over FY26 to FY29E, which means the yearly pace of sales growth the brokerage assumes for Ather. Proposed
3. Monitor Ather's market share, which the report assumes rising to 21.5% in FY29E and 23.5% in FY40E, because falling short would undercut the valuation behind the target price. Analyst inference

Evidence

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