Why Ather Energy is in a Huge Loss even after a rise in sales?

Ather Energy, an electric vehicle (EV) company supported by Hero MotoCorp, faced a significant increase in losses during the financial year 2022-23. According to the company's annual financial statements submitted to the Registrar of Companies (ROC), Ather Energy reported a loss of INR 864.5 crore in FY 23, compared to a loss of INR 344.1 crore in FY 22. This comes as a surprise because their revenue from operations grew by 4.3 times, reaching INR 1,784 crore during the fiscal year ending March 2023.

Expenses Triple Despite Strong Sales

Despite strong sales, Ather's total expenses more than tripled, rising to INR 2,670.6 crore from INR 757.9 crore in FY 22. This means that for every INR 1 earned from operations, the company spent INR 1.5 in FY 23. The EBITDA margin improved but remained negative at -38.3%.

Fundraising and Future Plans

In an effort to secure funds for new product launches, expand their charging infrastructure, and grow their retail network, Ather recently raised INR 900 crore through a rights issue with support from existing shareholders Hero MotoCorp and global investment firm GIC. Tarun Mehta, CEO, and Co-founder of Ather Energy, mentioned, "The last few years have demonstrated just how quick the EV transition in India can be and how it will be led by 2-wheelers. This round will allow us to expand our product portfolio while expanding our footprint."

Current Reach and Product Expansion

Currently, Ather Energy has over 200 retail locations across more than 100 cities and operates a public fast-charging network for electric two-wheelers with over 1,500 Ather Grids.

They recently broadened their product range, offering 2.9 kWh and 3.7 kWh battery options in their flagship 450X model and introducing an entry-level product, the 450S, to target a larger segment of the two-wheeler market. Founded in 2013 by IIT Madras alumni Tarun Mehta and Swapnil Jain, Ather is backed by Hero MotoCorp, GIC, NIIF, Sachin Bansal, and Tiger Global.