International brokerage firm Nomura has significantly raised its target price for Ather Energy, the Bengaluru-based electric two-wheeler manufacturer, signaling robust confidence in the company’s ability to lead India’s transition toward sustainable mobility. In its latest equity research report, Nomura reiterated a ‘Buy’ rating on the stock and hiked the target price to ₹1,470 from the previous ₹1,120. This revised target represents a substantial 22.5% upside from the stock’s recent closing price of ₹1,200 on the National Stock Exchange (NSE). Labeling Ather Energy as its "top pick to ride on the EV inflection," the brokerage highlighted a combination of favorable government policies, an expanding product portfolio, and a maturing consumer market as primary drivers for the company’s long-term growth.
The endorsement comes at a time when the Indian electric vehicle (EV) sector is undergoing a structural shift. While the initial adoption of electric scooters was driven by early adopters and tech enthusiasts, Nomura believes the industry is now entering a mass-adoption phase. The brokerage expects Ather Energy to be a primary beneficiary of this trend, given its status as a pure-play EV company with a vertically integrated business model that encompasses design, software, and manufacturing.
The Macro View: India’s Electric Two-Wheeler Inflection Point
Nomura’s bullish outlook is rooted in a fundamental reassessment of the Indian electric two-wheeler (E2W) landscape. The brokerage has revised its forecast for EV penetration in the two-wheeler segment, now projecting it to reach nearly 19% by the fiscal year 2030 (FY30). This is a significant jump from its earlier estimate of 16% and a stark contrast to the approximately 6.5% penetration expected in FY26. This trajectory implies a volume Compound Annual Growth Rate (CAGR) of approximately 40% between FY26 and FY30.
Several factors contribute to this accelerated adoption. The Government of India’s continued support through the PM E-DRIVE scheme (the successor to FAME-II) and various state-level subsidies have reduced the total cost of ownership (TCO) for consumers. Furthermore, the expansion of charging infrastructure and increasing awareness of the environmental impact of internal combustion engine (ICE) vehicles are narrowing the gap between traditional and electric scooters. Nomura notes that as the price parity between high-end ICE scooters and mid-range EVs continues to close, the mass market will likely tilt toward electric alternatives.
Strategic Product Expansion and the EL Platform
A key pillar of Ather Energy’s growth strategy is its move into more affordable price brackets. Historically, Ather has been positioned as a premium brand, with its 450 series competing at the higher end of the market. However, to capture the bulk of the Indian market, the company is developing a new, more affordable scooter based on its EL platform.
Scheduled for a launch in the third quarter of FY27, the EL platform is designed to target the ₹1 lakh to ₹1.25 lakh price segment. According to industry data, this specific price range accounts for roughly 45% of the total two-wheeler industry in India. By entering this "sweet spot," Ather aims to broaden its consumer base significantly. The company is also constructing a new manufacturing facility to support this volume expansion, ensuring that supply constraints—which limited market share to 18% in FY26—do not hinder future growth.
Beyond scooters, Nomura pointed toward Ather’s upcoming motorcycle platform as a potential "wildcard" that could provide further upside to current estimates. While the electric motorcycle market in India is still in its infancy compared to scooters, a successful entry into this segment would allow Ather to challenge legacy players in the commuter and performance bike categories, which remain the largest volume contributors to the overall two-wheeler industry.
Financial Projections and Volume Targets
Nomura’s revised target price is backed by aggressive volume and revenue growth forecasts. For FY27, the brokerage has maintained its volume estimate at 3.99 lakh units, which would represent a 53% year-on-year increase. Looking further ahead, Nomura has sharply increased its FY28 volume estimate to 6.22 lakh units, up from the previous forecast of 5.10 lakh units.
The brokerage also introduced its first projections for FY29, anticipating that Ather will sell 8.24 lakh units—a 32% increase over the FY28 target. These volume surges are expected to translate into robust top-line growth. Nomura forecasts revenue increases of 54% in FY27, 57% in FY28, and 36% in FY29.
Interestingly, Nomura expects Ather’s Average Selling Price (ASP) to rise by approximately 2% despite the introduction of lower-priced models. This is attributed to the company’s ability to pass on higher commodity costs to consumers and a strong brand equity that allows for premium pricing even in competitive segments.
The Path to Profitability and Margin Expansion
Profitability has been a central concern for investors in the EV space, as high R&D costs and initial capital expenditures often weigh on balance sheets. However, Nomura’s analysis suggests that Ather Energy is on a clear path to financial sustainability. The brokerage expects the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins to improve from negative 6% in FY27 to a positive 5.1% by FY29.
Ather is also expected to achieve Profit After Tax (PAT) breakeven by FY29. Several factors are expected to drive this margin expansion:
- Economies of Scale: As production volumes cross the 500,000-unit mark, fixed costs will be spread over a larger base.
- Vertical Integration: In-house manufacturing of battery packs and software development allows for better cost control compared to competitors who rely heavily on outsourced components.
- Phasing out of Competitor Incentives: Nomura noted that as Production-Linked Incentive (PLI) benefits for some competitors begin to expire or taper off, Ather’s relative cost position and premium brand positioning will become even more advantageous.
In the long term, Nomura believes Ather has the potential to maintain margins in the 15-20% range, consistent with premium automotive brands. While the brokerage slightly lowered its valuation multiple to 5.5 times Enterprise Value (EV)/Sales (from 6 times) to account for a forward-looking valuation through FY28-29, it emphasized that the current trading valuation of 4 times FY28 EV/Sales remains highly attractive given the growth trajectory.
Historical Context and Stock Market Performance
Ather Energy’s journey on the public markets has been nothing short of remarkable. The company made its debut on the NSE in May 2023 with a relatively muted listing. Shares were priced at ₹328, representing a modest 2.18% premium over its Initial Public Offering (IPO) price. Since that debut, the stock has defied early skepticism, embarking on a massive bull run.
Over the past year, the stock has surged by 273%, recently touching a fresh 52-week high of ₹1,222.10. The stock’s momentum has remained strong in the short term as well, gaining 16% in the last month and roughly 62% since the start of 2026. With a current market capitalization of approximately ₹46,480 crore, Ather has firmly established itself as a heavyweight in the Indian automotive sector, rivaling the market caps of some well-established legacy manufacturers.
External Risks and Market Dynamics
While the outlook is overwhelmingly positive, Nomura did acknowledge potential headwinds. The brokerage noted that it has factored in a slight moderation in EV demand as global fuel price risks linked to Middle Eastern conflicts have somewhat eased. Lower petrol prices traditionally reduce the urgency for consumers to switch to electric vehicles. However, the report clarified that should global crude prices remain elevated or spike again, there would be further upside to their EV adoption forecasts.
Furthermore, the competitive landscape remains intense. Ather faces stiff competition from Ola Electric, which currently leads in terms of pure volume, as well as legacy giants like TVS Motor Company and Bajaj Auto, both of which are aggressively expanding their ‘iQube’ and ‘Chetak’ electric portfolios, respectively.
Broader Implications for the Indian Economy
The rise of Ather Energy and the broader E2W sector carries significant implications for India’s macroeconomic goals. The shift toward electric mobility is a cornerstone of the country’s commitment to achieving Net Zero emissions by 2070. By reducing dependence on imported crude oil, the success of companies like Ather contributes to a more favorable trade balance and strengthens national energy security.
Moreover, the expansion of Ather’s manufacturing footprint in states like Maharashtra and Tamil Nadu is expected to create thousands of high-tech manufacturing jobs, fostering a domestic ecosystem for battery technology and power electronics.
Nomura’s conclusion remains steadfast: "Ather’s premium positioning keeps long-term margin potential in the range of 15-20%. We believe the current valuation at 4.0x FY28F EV/sales is attractive given the outlook. We maintain Ather as our top pick in 2Ws." As the company prepares for its next phase of growth with the EL platform and the upcoming motorcycle series, the market will be watching closely to see if Ather can convert its technological lead into undisputed market leadership.
