In Q2 FY27, Ather Energy reported its maiden quarterly profit, marking a rare achievement among Indian electric vehicle startups. The Bengaluru-based EV manufacturer posted a net profit of ₹1.3 crore following a significant turnaround from previous losses, driven by improved margins and strategic product positioning.
- Ather Energy posts first net profit of ₹1.3 Cr in Q2 FY27
- Capacity expansion planned to increase production to 11.4 lakh units by Q2 FY28
- New model Konarc targets mainstream petrol scooter buyers for growth
What happened
Ather Energy reported a consolidated net profit of ₹1.3 crore in Q2 FY27, reversing losses of ₹154.1 crore in the same quarter last year. This was also its first EBITDA-positive quarter, with margins improving from negative 9.6% to 4.9%. Adjusted gross margins reached 24%, reflecting stronger operational efficiency amid growing sales volumes.
The company achieved this profitability milestone despite continued challenges from elevated raw material costs, which negatively impacted gross margins by approximately 9.4% in the quarter. Temporary measures such as price hikes and SKU rationalization helped soften these pressures, while internal estimates suggest that demand outstrips current production capacity.
Why it matters
Ather’s breakthrough profitability sets it apart from many new-age EV startups in India, including listed competitor Ola Electric, which has struggled to achieve positive cash flow. This signals increasing maturity in the Indian EV market and validates Ather’s strategic focus on product-market fit and capacity investment.
However, CEO Tarun Mehta cautions that profit generation remains secondary to long-term growth plans. The company aims to invest ₹122 crore to raise combined production capacity in its Hosur and Maharashtra facilities from 35,000 units to 41,000 units monthly by Q3 FY27, and further scale up to 11.4 lakh units annually by Q2 FY28. This capacity expansion is critical to resolve supply bottlenecks and convert strong demand into sustained revenue growth.
What to watch next
Key to Ather’s future momentum is the performance of its recently launched Konarc model, which aims to lure petrol scooter users switching to electric by focusing on affordability and practical features such as a metal body, extended suspension, and long battery warranty. Konarc also offers better margin potential compared to earlier models, which could bolster profitability.
Monitoring commodity price trends and how effectively the company manages temporary margin levers like incentives and SKU management will be important. If raw material costs stabilize and production ramps up as planned, Ather could sustain and build on its profitability. Conversely, prolonged supply constraints or cost pressures might require further adjustments in pricing or incentives.