Analyzing Ather Energy’s Market Position and Financial Health
Ather Energy is an electric vehicle manufacturer that has recently submitted its draft red herring prospectus (DRHP) to the market regulator. However, experts express concerns regarding the company’s financial figures and market positioning. As of FY 2024, Ather’s revenue growth appears to be stagnant, and the company is grappling with significant financial losses, crossing the Rs 1,000 crore mark for the first time.
Market Share and Competition
Currently, Ather holds a market share of around 12%. In comparison, its competitors, including Ola Electric, TVS Motor, and Bajaj Auto, have managed to capture a significantly larger share of the electric vehicle market. According to the data outlined in Ather’s DRHP, Ola Electric has seen remarkable growth, escalating its market share dramatically from 21 percent in FY 2023 to 35 percent in FY 2024. Notably, Ola also achieved a record sales volume, delivering an impressive 53,000 units in March 2024.
Revenue Overview
In terms of revenue generation in FY 2024, Bajaj Auto led the segment with a total revenue of Rs 44,870.4 crore, followed closely by TVS Motor, which garnered revenues of Rs 39,144.7 crore, and Hero MotoCorp with Rs 37,788.6 crore. Contrasting this, Ather Energy experienced a decline in revenue, reporting Rs 1,754 crore in 2024—a fall of 1.5% year-on-year. This revenue decline coincided with a substantial increase in losses prior to tax, which soared 24.7% to reach Rs 1,060 crore compared to Rs 865 crore in the previous fiscal year and Rs 344 crore in FY 2022.
Customer Base Growth
Despite the financial hurdles, Ather Energy managed to grow its customer base, reaching a total of 114,000 customers by March 31, 2024, an increase of 23,000 new customers since March 2022. This growth reflects the company’s ability to attract customers despite the highly competitive landscape, although analysts caution that maintaining profitability amid such fierce competition remains a significant challenge.
Expert Insights on the Future
According to Deepak Jasani, Head of Retail Research at HDFC Securities, the cutthroat competition in the electric vehicle sector is largely to blame for Ather’s increasing losses. He points out that the current circumstances raise concerns for potential investors. With numerous players vying for dominance in the burgeoning electric vehicle market, it is plausible that only a few will endure in the long term, leaving questions about sustainability and growth prospects for companies like Ather Energy.
Conclusion
In conclusion, while Ather Energy demonstrates certain growth trajectories, such as an expanding customer base, the overarching financial losses and diminished revenue growth present a challenging scenario for stakeholders. As the electric vehicle market matures, the company will need to recalibrate its strategies to stay competitive and achieve financial viability in a crowded marketplace.
