Ather Energy shares closed over 3% higher at ₹580 on Friday. HDFC Securities has designated it as a top pick with a 'Buy' rating and set a target price of ₹748, indicating a potential upside of up to 29%. The company's growth is expected to be strengthened by increasing sales, store expansion, and new model launches.
Stocks to Buy: Ather Energy shares closed at ₹580 on the NSE on Friday, surging over 3%. HDFC Securities has named this stock as its top pick, giving it a 'Buy' rating and setting a target of ₹748, which is 29% above the current price. The company plans to increase its store count from 351 to 700 next year and launch affordable models. With sales of 46,000 units and a 79% revenue growth in the June quarter, Ather Energy's growth and profitability are expected to improve.
HDFC Securities' Confidence
Brokerage firm HDFC Securities has reiterated its 'Buy' rating on Ather Energy shares. HDFC Securities has also identified the company as its top pick, setting a target price of ₹748. This indicates a potential upside of approximately 29% from the current price.
HDFC Securities stated that Ather Energy's store count would increase from 351 to 700 by next year. Additionally, the company plans to launch more affordable models by the end of fiscal year 2027. This is expected to strengthen the company's growth and profitability.
Technological and Operating Initiatives
The brokerage also noted that the company's move to utilize low-cost lithium-ion batteries and the EL platform will improve operating margins. Furthermore, enhanced monetization of software and accessories positions the company to achieve positive EBITDA by FY28. Ather Energy's transition towards light rare-earth magnets is occurring rapidly compared to rival companies, without impacting production.
Share Performance
Ather Energy shares have surged by up to 93% since their listing on May 6 this year. In the June quarter, the company reported a net loss of ₹178 crore, a 3% reduction compared to the previous year. Meanwhile, revenue increased by 79% year-on-year to ₹645 crore.
However, the company's expenses also rose by 54% to ₹851 crore in the June quarter. During this period, the company sold approximately 46,000 units, marking a 97% year-on-year leap. EBITDA margin also improved from -33% to 16%.
Experts believe that Ather Energy's robust product portfolio and increasing sales are key drivers behind the strength of the company's shares. The introduction of new affordable models and expansion of its store network are likely to boost the company's market share. Due to the growing demand in the electric scooter market, both the company's growth and profitability are expected to remain b.
Indications for Investors
The 'Buy' rating and target price of ₹748 assigned by HDFC Securities have drawn investors' attention to Ather Energy. Experts believe that the stock could show further momentum in the coming months, driven by technological strength, robust sales, and the introduction of new models.
