Ather Energy shares extended their rally on October 27 after the electric two-wheeler manufacturer reported its first-ever quarterly net profit and received higher price targets from brokerages Nomura and HSBC. The stock gained around 4% in early trading, following a surge of nearly 14% in the previous session, as investors responded positively to the company’s September-quarter results. The improvement in profitability has strengthened expectations around Ather Energy’s growth, although questions remain about sustaining earnings and justifying its rising valuation.
The Bengaluru-based electric vehicle (EV) maker reported a consolidated net profit of Rs 1.26 crore for the second quarter of the financial year 2026-27, compared with a net loss of Rs 154.07 crore in the corresponding quarter last year. The turnaround represents an important milestone for a company that has been investing heavily in product development, manufacturing and expanding its presence in India’s electric scooter market.
Ather Energy’s revenue from operations increased 62.8% year-on-year to Rs 1,464 crore in the July-September quarter, compared with Rs 899 crore a year earlier. The growth reflects stronger business activity and demand for its electric scooters. The company has been working to expand its customer base through new products, an expanding retail network and improvements in its manufacturing capabilities.
Operating performance also improved significantly. Ather Energy reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of Rs 11.3 crore, compared with an EBITDA loss of Rs 133 crore in the year-ago quarter. Its EBITDA margin reached approximately 0.77%, marking a shift into positive territory.
The company’s adjusted gross margin improved by 160 basis points year-on-year to 24%. This improvement came despite pressure from higher input costs, including aluminium, copper, lithium and crude-linked plastics. A favourable product mix, pricing decisions and cost-control measures helped the company protect margins while increasing revenue.
The results attracted a positive response from investors, with Ather Energy shares rising nearly 19% during trading on October 26 before settling at Rs 1,574 on the BSE. The stock continued its upward movement the following day, briefly reaching Rs 1,702, according to market reports. The sharp gains placed the electric vehicle manufacturer among the market’s closely watched stocks.
Brokerage firms also revised their outlook following the earnings announcement. HSBC raised its price target for Ather Energy to Rs 1,800, while Nomura increased its target to Rs 2,070. Both brokerages retained positive recommendations, citing stronger profitability and the company’s growth prospects. However, these targets represent analyst estimates rather than guaranteed future prices, and actual market performance may differ.
The rally has been particularly notable because Ather Energy’s shares have substantially outperformed the broader market during 2026. Reports on October 27 indicated that the stock had risen around 121% since the beginning of the year. Such gains suggest that investors are increasingly factoring in the possibility of sustained growth in India’s electric two-wheeler market. At the same time, a sharp increase in share price can leave a stock vulnerable to profit-booking if subsequent results fail to meet expectations.
Alongside its financial results, Ather Energy has announced plans to expand manufacturing capacity. Its board approved capital expenditure of approximately Rs 122 crore, including taxes, to increase production capabilities at its Hosur facility in Tamil Nadu and its upcoming Factory 3.0 in Chhatrapati Sambhajinagar, Maharashtra.
The expansion will increase annual production capacity at the Hosur plant from 4.2 lakh units to 4.95 lakh units. At Factory 3.0, which is under construction, planned annual capacity will rise from five lakh units to 6.5 lakh units. The additional capacity is expected to provide greater flexibility to meet demand as the company expands its product portfolio and distribution network.
Manufacturing expansion is important because the Indian electric scooter market is becoming increasingly competitive. Ather faces competition from established manufacturers and newer EV brands seeking to attract consumers with different price points, battery technologies, features and charging solutions. Maintaining product quality while controlling production costs will be essential as the company attempts to grow without sacrificing profitability.
The company’s future performance will also depend on consumer adoption, battery costs, charging infrastructure and the availability of affordable electric scooters. Demand may fluctuate as buyers compare electric vehicles with petrol-powered alternatives, particularly in markets where upfront prices and access to charging facilities remain important considerations.
Ather Energy‘s latest results provide evidence that its financial performance is improving, but one profitable quarter does not establish a sustained earnings trend. The company must demonstrate that revenue growth can translate into consistent profits while funding capacity expansion and competing in a fast-changing market.
The immediate stock rally reflects optimism about Ather Energy’s turnaround, supported by stronger quarterly numbers and higher brokerage targets. Whether the momentum continues will depend on future sales, margins, production execution and the company’s ability to maintain profitability as it scales its electric two-wheeler business.