Nomura initiates Ather Energy stock with Buy rating on EV market growth

Nomura/Instinet initiated coverage on Ather Energy Ltd (ATHERENE:IN) with a Buy rating and a price target of INR458.00. The Indian electric two-wheeler manufacturer, which holds a premium market position and operates the country's largest EV charging network, has shown steady improvements in gross margins and market share. Nomura projects Ather's electric scooter market share to increase from 11.4% in FY25 to 17% by FY28, anticipating strong growth momentum driven by continued electric vehicle adoption in India.

Analysis

Nomura/Instinet has initiated coverage on Ather Energy Ltd (ATHERENE:IN) with a 'Buy' rating and a price target of INR 458.00, signaling strong confidence in the Indian electric vehicle manufacturer. The positive outlook is supported by Ather's established premium market position, which is attributed to its leadership in technology and innovation. The company has demonstrated fundamental strength, evidenced by steady improvements in both gross margins and market share despite facing increased competition and the absence of production-linked incentives. Ather's strategic advantage is further solidified by its operation of India's largest charging network, comprising 4,850 chargers. Nomura projects a significant expansion of Ather's electric scooter market share from 11.4% in FY25 to 17% by FY28, which would capture approximately 5% of India's total scooter market. This growth is expected to continue beyond FY28, capitalizing on the secular trend of EV adoption in the region.

Key Decisions for Investors

• Investors with an interest in the Indian EV sector should view Nomura's 'Buy' initiation as a strong bullish signal, underpinned by the company's improving fundamentals and projected market share gains.
• Given Ather Energy is a private Indian entity, prospective investors should investigate avenues for exposure, such as private markets or pre-IPO opportunities, using the INR 458.00 price target as a key valuation benchmark.
• It is critical to monitor Ather's execution against Nomura's forecasts, specifically its ability to grow market share from 11.4% to 17% and sustain margin improvement in India's competitive landscape.