Ather Energy Ltd. (NSE: ATHERENERG) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Murali Sashidharan — Director of Communications and Government Relations
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Analysts:
Nishit Jalan — Analyst
Kapil Singh — Analyst
Chirag Jain — Analyst
Mukesh Saraf — Analyst
Amyn Pirani — Analyst
Nitin Arora — Analyst
Vijay Pandey — Analyst
Manish Ostwal — Analyst
Pratiti Khara — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Aether Energy Limited Q3 and FY26 result conference call. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude should you need assistance during the conference call please signal an operator by pressing star on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mullis Shashidaran head of Public and Government Relations at Ather Energy. Thank you. And over to you sir.
Murali Sashidharan — Director of Communications and Government Relations
Thank you. Good evening everyone and welcome to ather Energy Limited’s Q3FY26 earnings conference call. From the management team we have with us today Mr. Tarun Mehta, Executive Director and Chief Executive Officer and Mr. Sohel Parekh, Chief Financial Officer. Before we begin, let me draw your attention to the fact that today’s discussions may include certain forward looking statements which are predictions, projections or other estimates about future events. These statements are subject to various risks and uncertainties that may cause actual results to differ materially. Please note that this conference is being recorded. With that I would like to.
I would now request Mr. Tarun Mehta to share his opening remarks. Following that we will open the forum to for question and answer session.
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Hey. Thanks Mali. So let me just get straight into the deck. So Q3 was a particularly strong quarter for us. Units sold were 68,000 which was up 50% year on year. Total income was just shy of 1000 crores. Up again 53% year on year. Adjusted Gross Margin was up 111% year on year and 19% quarter on quarter to 251 crore which is only about 25% which 25% itself is a 700bps improvement year on year. But the biggest story for us frankly was the EBITDA improvement. Ebitda improved by 1600 bps year on year and 700 bps quarter on quarter to land up at negative 3 overall.
So very strong performance there. The primary driver for us in the last couple of quarters has been operating leverage which has really been driven on the back of expanding demand, particularly expanding demand for Rista. Q3 was the first time we. Q3 was the time when we crossed 5 lakh units sold cumulatively ever. But Ristas crossed 2 lakh units sold within that. So it’s been growing really fast and driving sales across the entire country for us. Few highlights from Q3. This was the first time we crossed 30,000 units registered and sold in a single month. The month of October, which also happened to be the highest ever market share we have achieved till now, which was comparatively still younger distribution footprint.
This is certainly a fairly strong performance by our partners across the country. Distribution has continued to expand pretty much in line with what we had guided. We closed Q3 with 600 stores open pan India and we are very much in line for opening 700 stores by the end of this fiscal. Overall for Q3 we achieved 18.8% market share, 67,800 units wholesale, up 22,000 units over same time last year. In fact, our actual registration count and actual units sold were materially higher at almost 72,000 units. And it was very efficient management of our channel inventory with our partners, which allowed us to reduce the channel inventory towards the end of the calendar year.
Which is why there’s a considerably higher retail than actual wholesale, a benefit that should continue accruing for the next few months. Breaking down this sales growth and sales performance, let me start from Middle India which we’ve guided several times has been the biggest focus of of growth for us in this over last entire year. Q3 was a very strong quarter. We added almost 3% market share up from 14.6 to 17.4% market share. Gujarat is holding up really well. We achieved 25% market share. Madhya Pradesh, Maharashtra, all are performing incredibly well. In fact, Maharashtra was a big positive delight.
We jumped up to 18.6% market share in Q3, our strongest performance till date. I do believe that there is some more juice to go here in Middle India as an entire geo for us and I’m particularly excited about Odisha where we have seen our market share roughly double from 8.5% to almost 15% market share in the last couple of quarters. I believe that Odisha in addition to Maharashtra and Madhya Pradesh will continue contributing a lot in the coming months. Also coming to rest of India, again similar strong success, strong growth. Our market share was up at 12.6% in fact for rest of India.
While obviously I’m very bullish, once we launch EL as a platform and its ensuing products, this kind of a market share growth is extremely heartening. With our existing portfolio itself. Very strong performance in jk, Punjab, Rajasthan, Rajasthan particularly. In fact I would say places like Rajasthan and Punjab are starting to look like middle India markets for us with 14, 15, 16% market share is there. We will continue investing in rest of India, particularly preparing for EL’s launch with more stores and more marketing in the coming quarters. Also south, we have retained our leadership and we have defended our market share really well.
Despite a strong series of despite very strong competitive intensity in the entire zone, we were yet again number one in the entire zone for the entirety of the quarter, ending with 24.4% market share coming to gross margins. Gross margins has been a very consistent story this entire fiscal. In Q3 we added 1% margin on account of superior revenue. We improved our margins by 1% on back of reduction in pox and 1% margin improvement was down to us being able to claim subsidies better, leading to a 3% improvement in AGM compared to Q2. Not just unit economics but also EBITDA.
Now let me just put and before I get into the EBITDA story, let me just give some context. We believe that this year there are some headwinds ahead for the industry, auto in general and ev, specifically in terms of commodities and potential risks to subsidies and potential pullbacks there to better manage those, we’ve been working hard over the last few quarters and we’ve been very disciplined with our fixed costs. So while unit economics has improved and has been at a great place overall, we’ve also ensured that our fixed costs have been maintained really well to ensure that our overall EBITDA lands at a better place.
This prepares us well for potential headwinds later this year so that our P and L can be protected even through that time. And that work is what you see reflected in numbers here. For example, in all of FY25 we improved our EBITDA by roughly about 1300 bps. In just 3/4 of FY26 we have already improved our EBITDA by 1400 bps and we do believe that we will exit FY26 with an even stronger position given current trajectory. This EBITDA. So Q3 EBITDA was at roughly about negative 29 crore, about roughly 3% negative, just under 3%. One big so there are a lot of reasons for us to be confident about operating leverage and because the growth outcomes, because the growth outlook is strong on the back of the work we’re doing with el, the work we’re doing with the new factory in oric.
But there’s another lever which is specifically a strong Ather success which is our non vehicle revenue contribution. Typical legacy players I think would do about 15, 16, 17%. Ather’s non vehicle revenues is already up at 14% in Q3, which is obviously our highest ever. And this is despite our service revenues being obviously still very early stage because the installed fleet size is obviously limited. So we do believe that there is a lot of compounding possible on non vehicle revenue and given that most of the non vehicle revenues end up accruing superior gross margins, the contribution to gross margins is much higher.
The largest contribution to non vehicle revenue comes from the sale of software in the form of pro packs and I want to spend a few minutes on our software story today because we’ve launched a new version in the previous quarter and there are a lot of launches ahead of us and this has overall contributed to a strong profitability or strong unit economics for us. Till date, our software suite is broken over four different vectors of safety, Navigation, Convenience and Ride assist features. Safety features are features like Find My Scooter, theft into alerts, Live Location sharing.
Navigation is things like Send location via WhatsApp, Google Maps on Dashboard, so on. Convenience of features like Ride Story so you can track your vehicle usage, remote control over your vehicle and Ride Assist are features that alter your riding style. Features like Auto Hold, Traction Control, Magic Twist, so on. While the financial performance of the software products is visible to most of the most analysts on the street today, we also want to talk a little bit about all the work they’re doing to ensure that consumers continue to really love the product because that word of mouth is important for continued success of this product.
So for example, if I were to share a few stats around usage about 40% of our users use safety features like Live Location sharing, Find My Scooter at least once every month now more than 50% of our users use onboard navigation, which is Google Maps at least once every week. In fact, There are about 50,000 power users who use navigation every single day now. Ride Stories, which was a quirky feature we had built a while ago, today has 37% monthly average usage. MAU There are a lot of users who are truly hooked on to the mobile app because of this feature.
Ride Assist is however, the holy grail of what great software features should enable for the brand, which is extreme stickiness. And that’s what we are seeing. These are features that are unique to ather. They’ve been built with a lot of deliberation and once you start using them it’ll be very hard for you to switch products and go to another brand. These are features like Magic Twist where you can use the throttle to brake or auto hold and so on and forth. And the stickiness of these features is insanely high. Now 23% of our fleet uses Magic Twist every single day now.
More than two thirds of the fleet uses Auto hold every single day now. And it’s stickiness like this that gives us the confidence to introduce more such features with the latest release being that of Infinite Cruise where with just one button you can put your vehicle in cruise and you don’t need to do anything after that. Infinite Cruise was introduced a few months ago to our Highest end product ather450. Apex is already seeing very similar stickiness as Auto hold and magic twist with 31% DAU daily active users. Which is why recently we have now pushed infinite cruise to 40,000 more scooters, cementing the technology capabilities of the brand and the power of buying software because we can remotely upgrade your vehicle consistently and launch new features on it.
So together, this kind of ensures that not only we are seeing good outcomes out of our software financially, we are also investing in ensuring that there’s strong product truth underlying these experiences so that people keep talking about them and more people recommend to each other that you should buy the propat with an ather. And it’s not just product and tech but also marketing which is investing in creating this entire asset. So starting January we have now started one of our bigger campaigns which is called Life is Easy on an Ether where we are celebrating what we call as magical experiences often born out of the software Auto Hold, Magic Twist, Infinite Cruise, so on and forth outcome metrics.
Honestly, that’s already public, so no surprises there. Very strong performance in Q3 with 91% attach rate for the software products. Despite a roughly quadrupling of our volumes over the last six quarters, the Propa attach rates have been very consistent. We’re investing more in the coming months. There are features like Pothole alerts, Voice on Ether parksafe alerts that are scheduled to go live, which should hopefully further enhance the value of this entire suite. On other sources, one big piece of investment continues to be charging infrastructure for us where we have consistently stayed ahead of the market.
Ather runs the largest fast charging network for electric toolers in the country with our total network size reaching 5000 charging points as of 31st December. These are charging points operating on Lex, which is our charging protocol now publicly available. And also we’ve been able to successfully drive monetization of these charging points so it’s no longer really pure play cost center for us. We’re also able to monetize them quite responsibly. We had the multi language dashboards which really went quite viral and was a big marketing hit. Infinite Cruise which I spoke about Kids helmets which have just started scaling up now.
We launched Rista in the Sri Lankan market. We’d already launched Rista in the Nepal market a while ago. We’ve now further expanded that into Sri Lanka now. And finally a recent announcement where we announced the entry into the auto insurance space. This is us getting into the value stream more in the middle of the value stream, taking over the administrative work around as a agent, as an insurance corporate agent. The primary reason for us to enter there was to take better control of the end to end consumer experience and deliver a delight feature there. But we also expect the entire play to be margin accretive for the company.
Finally to just summarize the quarter. Strong quarter at about 995 crores. Total income 50% Growth in units sold 18.8% Market share pan India for the entire quarter up almost 2.5 times since Q1FY25, 600 stores span India revenue from operations per unit hitting 1.4 lakhs. Strong improvement in COGS, strong improvement in gross margin AGM at 25% and strong improvement in EBITDA ending with negative 3% for the quarter. With that, I think I’m at the end of my walkthrough. We can now open it up to Q and A. Thank you.
Questions and Answers:
operator
Thank you so much sir. Ladies and gentlemen, we’ll begin with the question and answer session. Anyone who wishes to ask a question by Press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may Press Star and two participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question comes from the line of Nishit Jalan from Access Capital. Please go.
Nishit Jalan
Yeah, hi, thank you for taking the question and congratulations on good set of numbers. I have two three questions actually. Firstly on the volume and the market share side, I think we seem to be doing much better than probably what you would have also hoped up a few months back. So just wanted to understand this Distribution network. We’re expanding to 700 now, but how do you see that panning out in the next two, three years? Right. And will distribution network be the biggest driver of our market expansion here on because still our penetration is fairly low and the gain is coming more from within India and rest of the world where we are adding where we are adding a distributor.
So how do you see the potential of distribution expansion in the next two, three years? Second is on product side. El, if you can share more thoughts here as to when should we see this product getting this platform getting launched and what kind of products you would look at from this platform and Will the product be initially manufactured in Huzoor before moving to Aurangabad? And thirdly, on commodity side, I just wanted to understand while we can see that aluminum, copper and all have gone up, anything on EV related products that you would want to highlight as to what kind of price movements or inflation and all that we might see and what is our response in terms of price hikes that we have taken from and what we plan to take to kind of offset the same.
Thank you.
Tarun Sanjay Mehta
Thanks Nishit. So let me just go sequentially. So what’s the distribution potential? So I personally see distribution and the product portfolio being very intricately linked. You can’t delink them and expand either and hope to get returns. So for example, with the introduction of Rista is where we started feeling that, you know, our distribution like we have a fairly well model in the backend. That helps us understand, you know, what kind of independent store has become viable with the existing portfolio. So we had estimated that about 600 and now 700 stores are independently viable comfortably with just Rista and 450 alone.
And honestly with expanding market, that number is going up. So there is still some more potential for distribution expansion for a few more quarters. It can’t continue infinitely, which is where the next product plays a role. EL is scheduled for launch later this year, which is where and the launch of eln, that’s leading into a second question. Obviously I’m not sharing specific details about the product or its exact pricing or its exact positioning, but directionally, EL is a lower cost architecture for us, which is something we can then use to lower our entry price points without losing our strong margin expectation.
So we are going to use that. And with a better price point and a more flexible platform in el, we believe the markets, particularly the northern north India markets, could open up materially to us. So along with EL is how we will look at expanding our distribution in sync with it the next few quarters. I think there’s still work to do just to sort of keep opening up what RISTA alone demands. But by that point EL comes in and then EL starts another wave of future store opening. I do believe that a couple thousand stores in the next few years is a pretty healthy ask and practically possible with the expanding portfolio.
EL obviously will scale via oric, but we are looking at the exact timing and we are open to starting EL out of the Hosul premises to de risk potential timelines here because the product readiness is pretty much on time. So if required, we will be willing, we will be ready to start EL out of Hosur itself to get the initial traction going while we continue scaling it via Orec. Finally, on commodities impact, honestly I would love to tell you this is cyclical and there’s a very smart analyst with a great report who knows what’s happening.
I don’t think anybody knows what’s happening. This is truly unprecedented in every way. There are a lot of commodities going haywire. Some of it is fundamental. Yes, there are some commodities that do seem to secularly be in a demand supply gap. A lot of them probably are just. They seem to me like a little bit of a. They seem to be stuck in some sort of a hype situation right now. Even hype situations can last a couple quarters, so you can’t exactly predict. So. So we are preparing for the worst. It’s hard to say. I think it’ll be a few percentage points of risk, this coming for the rest of the year.
Something hopefully we’ll be able to work with given our increasing scale. And particularly yield is a good way to de risk some of these commodities that are going haywire, particularly things like aluminium. But yes, I think commodities are in a crazy space right now and we all need to be very careful.
Nishit Jalan
Thanks. Just a couple of follow ups. One on wealthy aluminium, copper and all we can price this anything on related to EV components, battery unlimited cost or DVR basically electronics or anything where also you have started to see inflation or is it mostly the hard metals where we are seeing where we are seeing inflation. And secondly, I asked around price hikes, how much we have already taken so far or any plans for further price hikes.
Tarun Sanjay Mehta
So I think then because I think price hikes can’t be in isolation, can’t be just purely linked to commodity risks. But to your specific points, I think the commodity stress is distributed over both auto and the battery side. We are seeing certain commodities on specific chemistries also going up. I think I would still say the battery side is a bit more manageable. It is the vehicle side which seems a little bonkers right now.
Nishit Jalan
Okay, thank you.
Tarun Sanjay Mehta
Yeah.
operator
Thank you so much. Our next question comes from the line of Kapil Singh from Nomura. Please go ahead. Yeah.
Kapil Singh
Hi Tarun, Congratulations to you and your team for a wonderful set of results. Firstly, on the cost side, just want to understand as you look forward, where are the areas where you can reduce costs? Is it more coming from scale or is it coming from some, you know, value engineering or innovations that you’re doing and you know, just in terms of, you know, contribution which, which of these areas has more Potential just some color on that. And you mentioned that you will exit this year on a stronger note is there. You know it seems a little surprising given the commodity inflation we are seeing.
So just some color on that as well.
Tarun Sanjay Mehta
Thanks Kapil. So there’s a cost reduction can come further from. I do believe that our industry is still not at steady state cost structures by any stretch. I think there is depending on the product. I feel there’s like a 10, 20% long term potential still easy in the. In the cost structures. For us the easiest opportunities are in the mechanical sides first which is where a lot of the work on EL leads us to a steel frame more traditional in its sense enclosed gearbox instead of the current transmission design. And a few other manufacturing improvements hold enormous amount of potential in easy and large cost reductions.
More particularly aimed at ether in the near term, let’s say the next four to six quarters. I would say there are certainly yet and as scale gets in the 40, 50,000amonth I think they’ll start becoming more and more visible on the vendor side. Instead of just calling them pure negotiation opportunities I will reframe them as me opportunities. Manufacturing engineering we are getting into the details of the manufacturing process and that’s the difference between ICE and EV Today a lot of the EV specific designs haven’t had the time to be perfected from a cost and specifically a process cost logistics, cost inventory and storage cost perspective.
So there’s a lot of lack when you, when you start getting the details of it. There’s like, like that that can add up to several thousand rupees. So I think this detailed work now will continue for the next several years and there’s a lot of long term squeeze potential squeeze potential in the cost structures but obviously it requires work and which is what what we are geared towards. Did I answer all your questions? Yeah, I think so. No, I was just indicating that YTD we are at negative 9% EBITDA YTD we are negative 9%. So I do believe that by the exit of FY26 we would be better than negative 9 because the recent quarters we’ve been performing better.
So averaging out we’re taking the average down. So I think we’ll average better. Yes, there are some commodity risks starting to build up but I think we’ll still be able to manage them at least in the short term.
Kapil Singh
And Tarun, do you feel that there is more pricing power for you? One of the disadvantages you know unfortunately is that you don’t have PLI and we are Seeing in some of your competitors very strong PLI contribution. So is there scope to take up pricing as well over the next two years or you know, and how do you think things evolve after FY28 when the PLI ends?
Tarun Sanjay Mehta
You picked up my favorite topic. I think actually I want to reframe this for the street that us not having PLI is actually one of the strongest and one of the biggest reasons to be optimistic about us in the midterm because we are already operating on the most cleanest pricing principle. We don’t have the risk of PLI changing our pricing architecture completely a few years later. And PLI is not a ten year policy. So I would say not having PLI hurts, but I think that’s a good pain to take right now to have a very, very, very resilient PL in the next two, three years.
Now to your base question. Is there more pricing power? We have been very disciplined about timely price hikes. In fact, even in the start of this quarter Q4 we have announced a 3000 rupee price hike and we are managing that well. Obviously price hikes are distributed across different GEOs that are distributed across the base vehicle. So actually one advantage that ather has is that we have the levers of the base vehicle price and the Atherstack probe price. Right. So between these two levers we can also distribute the price hike giving consumers a little bit more flexibility and giving us better ability to land the message.
So I think operating in a non PLI world has made us incredibly creative and incredibly disciplined about pricing. And yeah, we’ve just taken a price hike and I think we’re managing it quite well.
Kapil Singh
Okay, great. Any thoughts on what would be your monthly volume run rate for a EBITDA breakeven.
Tarun Sanjay Mehta
Couple? Sorry, we are not giving that guidance. I know it’s a straightforward match, but from company’s perspective we are not sharing guidance.
Kapil Singh
Okay, thanks and best wishes. Look forward to a stronger Q4 as well.
Tarun Sanjay Mehta
Thank you.
operator
Thank you. Our next question comes from the line of Chirag Jain from AMK Global Financial Service. Please go ahead.
Chirag Jain
Yeah, thank you for the opportunity and congratulations on a very strong performance. I just wanted to understand a bit more. You did mention that non vehicle revenue contribution typically is 15 17% for ICE companies and we are already at 14% even though this service revenue is still at early stage. So what would be the steady state non vehicle revenue contribution if you can highlight that would be great as we see maturity in terms of the business model.
Tarun Sanjay Mehta
Yeah, so I think software is already performing well, while there could be still some more juice left in the pricing there, but that’s hard to predict. If you can maintain software’s contribution to our non vehicle revenue, I think that’ll be terrific and fantastic, which we’ve been lucky enough to have pulled off for the last six quarters. But beyond software, actually the good news is almost everything beyond software compounds basis your fleet size. Software is the only thing that we actually sell at retail and it’s linked to how much you retail that month. But if you look at spares and service revenue, that just compounds basis fleet size.
And obviously vehicles are going to stay for 10, 20 years. If you look at charging revenues, they compound basis fleet size. So there’s a lot of upside available here today. Things like service pairs barely add up to 2, 3% of our revenue. And this is standard industry two wheel industry math. Those numbers are several times higher for legacy players. So I think there’s a lot of upside potential there in the next three, four years. Obviously this is not like a two quarter story, so you will have difficulty modeling this in a quarter or two. But if you take a three, four year view, I think there’s a lot of juice in the non vehicle side for the company and there is, I would say material upside available here.
Chirag Jain
Okay, thank you. And one question on the overall electric two wheeler industry demand environment. We have already seen cut on GST on ice two wheelers plus probably we might have to take maybe sharper price hike as you also mentioned. And again this 5000 rupee subsidy of PME drive will expire by March. So how do we see the demand environment for the electric solar industry for next financial year? I mean we have already seen some correction but even though we have seen a comeback, but still not the pre GST levels in terms of EV penetration.
Tarun Sanjay Mehta
Actually I’ve been always of the opinion that I think the real growth in the EV tool industry has been masked because of a lot of vehicles below the 1 lakh rupee price points which kind of disappeared in the last one year. So if you were to model the industry as two different segments, products priced above a lakh and products priced below a lakh, the products priced above a lakh segment has grown at a beautiful growth rate over the last 18 months, 18, 21 months, 6, 7 quarters. Products price below a lakh has been shrinking at a very dramatic pace.
Which is why when you put the entire industry together, you’ve seen a more humble growth than what what we feel as an operator here. Now what’s starting to change is I think a lot of that fluff in the sub 1 lakh rupee segment has disappeared. I do not believe that the sub segment does not exist. It does exist and there is a segment and there are buyers. And I do believe that from industries perspective now there are good products priced fairly there. Which means that segment’s growth will also now be incremental. And the north of 1 lakh rupee segment in our assessment is growing already.
Well, you will see signs of it in the months of December and now January. December was if I’m not wrong, almost 30, 40% up over same time last year. Even January was I think about 20, 30% up over same time last year. So we are now finally starting to see those 20, 30, 40% kind of month on month, sorry year on year jumps that we’ve been seeing from one perspective. But I think you will now see start seeing that at a full industry level.
Chirag Jain
Thank you. And just lastly on the E motorcycle, any thoughts and any launch plans. Thank you.
Tarun Sanjay Mehta
We are still at an early stage. We are still evaluating it. Honestly all hands on deck, completely occupied with the scooter segment right now, particularly with EL and its associated products. There is work happening on motorcycles but nothing for me to announce or declare today.
Chirag Jain
Okay, that’s it for myself. Thank you.
operator
Thank you. Next question come from the line of Mukesh Sara from Evidence Investment Managers. Please go ahead.
Mukesh Saraf
Yeah, hi, good evening and thank you for the opportunity. My first question is again just relating to the propac and the fact that our tax rates remain quite, quite high around the 90% mark despite the fact that we are seeing growth in some of these states that will associate more with say a value conscious customer, Something like an Orissa example. So just trying to understand, I mean is this propac attach rate similar across these newer geographies that you’re kind of seeing the increase in penetration or is there some disparity between some of these say your southern market versus say some of these newer markets?
Tarun Sanjay Mehta
Right. Thanks Mukesh. So very good question and a pretty good story there. Also you will notice a very small change which will allow me to dig into. And From I think Q1FY25 to Q3FY26 over almost six quarters, Propa rates have gradually inched up from 89 to now 91%. What’s been happening underneath is south has been always very strong at roughly about 89% or 90% or 93 even higher actually sorry, much higher than 90%. It was the non south markets that used to have a lower pro Pack attach rates. In the last earnings call I had highlighted that what we estimate is that as a store starts aging, as it starts clocking some time, if a store has been open up for a year or two, the first thing that starts happening is its pro pack attachments start gradually inching up.
Because the entire business model is new, not just for us, but also for our retail partners. Right. They’ve never really been exposed to a model of selling a very, very high margin and a meaningfully expensive accessory of software with a two wheeler. So initially there’s a lot of hesitation, a lot of lack of clarity at the retail partners level in selling these propacks, but over a few quarters the math becomes obvious to them. So then they start properly upselling it and that’s when it starts taking off. We’ve seen consistently that the longer the store remains open, higher is its pro pack attach rate.
So for example, in the western zone, Maharashtra, Gujarat, we are now seeing pretty healthy and frankly quite satisfying propac attach rates. Definitely Maharashtra, even Gujarat’s getting there. MP because of the pace of new store expansion, on average you will see a softer growth. But if you were to separate stores out by vintage, you will see a very strong growth trajectory there. Also overall, at a high level, you give stores time, their proback attach rates go up irrespective of whether they are in south west, north east. So that seems to be a fairly dependable trend. Yes, There will be a 5, 10% delta between GEOs depending on the economic indices of the Jio, but nothing material.
Mukesh Saraf
Sure, great, thanks for that. And just in continuation with this, is it then fair to kind of say again vis a vis conventional thought process about say, total cost of ownership parity between ice and EVs for your set of customers who are looking at say your products? That doesn’t matter really anymore. Is it fair to, you know, kind of say that, that they’re willing to kind of spend this extra 10k odd for the propaq? Definitely not value conscious there and definitely not looking at say a nice cost of cost of ownership parity price.
Tarun Sanjay Mehta
Okay, let me give you a different, let me give you a slightly different perspective for you to reframe this for yourselves. The total cost of owning and running an EV over let’s say a 10 year period will be take the middle of our portfolio, something like a 1.3 lakh rupee product, add another 30,000 40,000 rupees on it on electricity, another 20,30,000 rupees for service, you’re looking at roughly about 1.8 1.9 lakh rupees as the total cost of operating an EV. The base evidence compared to that the cost of the Software is about 6% if you look at the usage.
6% or 7% if you look at actually what people actually use on an aether scooter today, what features they spend their time on. I think we are massively over delivering value in the software Pro pack compared to the price that we are charging today. I would argue that one of the largest chunks, not the largest, but one of the largest chunks actually sits inside that pack there. And it is only the alien nature of that product today in the market that is making us price it here. Otherwise in theory we should be charging more because that’s where the consumer is actually driving so much value out of.
So I would say that independently the PROPAQ is very high value which is why the attached rates are what they are. Does the total ownership cost matter for the end consumer? I think it always matters and I think it really doesn’t vary by segment, not till these price points at least. Sure, 3, 4 lakh bike might behave differently, but a 1, 1.5 lakh rupee scooter buyer, I think the total cost of ownership matters. But the thing is, I would also say it is post purchase rationalization. You buy the vehicle because you really, really fall in love with it.
You and then you rationalize it to yourselves and to your friends and to your social circles that I know it’s expensive but listen, I say like 30,000 rupees on petrol every year man. What are you talking about? And luckily for us the savings compared to petrol are just so humongous that even with the 450 apex at 1.9 lakh rupees, I think you can still feel happy about where you will land up financially. So I think the, the fundamental truth is just astoundingly strong.
Mukesh Saraf
Got it, got it. Great, thank you. Thanks a lot for the detailed answer.
operator
Thank you. Our next question comes from the line of Amin Pirani from JP Morgan. Please go ahead.
Amyn Pirani
Yes, hi, thanks for the opportunity. Just to follow up on the propag discussion that you just had. So a clarification. Can people who buy just the vehicle come back at a later date and still buy the propack? And does the pricing change? Like how does it work?
Tarun Sanjay Mehta
Yes you can, but we obviously want to encourage you buying up front because we do believe that if you don’t buy up front you’re not just experiencing the propaq, you’re not experiencing all the, all the value out of it. And if you’re not experienced something and you don’t know about it, how will you come back? So we price the products differentially. If you buy it along with retail, it’s a lower price product post retail. I think we bump up the price 30% or something so it’s more expensive to buy. So we really, really want to ensure that for a new product like this, we don’t have you wait because then you may not think of coming back.
Amyn Pirani
Okay. Okay. And just wanted to, you know, also talk about something that you discussed last time. Also, is there any update from the government on the rollout of abs and what is the kind of discussions you’re having on your own version of the ebs, which obviously, you know, as we talked about last time, was potentially even more effective and less costly than the abs.
Tarun Sanjay Mehta
So we’ve, we’ve been engaged with relevant ministries and policymakers. We are also aware that this is a hard ask because I think we’re too, I think we lack branding. I think it’s been very rare that for a globally famous technology like abs, an Indian alternative would emerge. So there’s a lot of, honestly, there’s a lot of advocacy work required here. We are committed to it and we do think that there’s merit in pushing this. But for now, I think our base assumption is that this is an add on as opposed to a immediate replacement for something like aps.
Amyn Pirani
Okay, but any timelines on, because earlier ABS was supposed to happen in January 26, which seemed very ambitious, but is there any revised timelines which are coming from the government on that.
Tarun Sanjay Mehta
We haven’t heard of a revised timeline? We do know, obviously it’s deferred, but we don’t know till then.
Amyn Pirani
Okay.
Tarun Sanjay Mehta
It actually works better for us because if without mandate we can, we can offer people the option of an EBS in our future products. I think that’ll be a, that’ll be a good win for either.
Amyn Pirani
Okay, great. I’ll come back in the queue. Thank you.
Tarun Sanjay Mehta
Thanks. Thanks, Amin.
operator
Thank you. Our next question comes from the line of Nitin Arora from Access Mutual Fund. Please go ahead.
Nitin Arora
Hi, thanks for answering all the questions. Mostly just on your EL platform, when you talk about the lower cost structure, can you talk a little bit, you know, in terms of mix, do you see that cannibalization, because that was the risk everyone was building in. And when you talked about ritsa, it looked like cannibalization is not seen anywhere now. So can you talk about a little bit trends? You know, how this volume ramp up has happened and no cannibalization we are not seeing.
Tarun Sanjay Mehta
So sorry, your question is that why did we not see cannibalization of 450 with Rista or what will happen with Rista post cl.
Nitin Arora
Post cl.
Tarun Sanjay Mehta
Okay, so there was, by the way, some cannibalization of 450 with Vista, by the way. But yes, on balance it just incrementally added a ton of more volume. So everybody’s happy. And that’s, that’s great. With el, we do expect that there will be some cannibalization. It will also depend on the exact positioning of the first EL product, its pricing, its feature sets. But there will be some cannibalization. Now, unlike 450 and Rista, if there is cannibalization here, actually as a company, we are happy because EL has underlying better cost structures. So any customer who ends up choosing EL over Rista of their own free will actually helps us make more money out of it.
So I don’t think we mind it. This is one of the best scenarios to be in as far as standardization is concerned. So which is why we are not overtly worried about, okay, what happens if there’s cannibalization? In fact, we have the opinion if there’s cannibalization, great. Our margins actually improve even further than what we anticipated.
Nitin Arora
Thank you very much.
Tarun Sanjay Mehta
Thanks Nitin. On overall volume expansion, we expect EL to be able to expand volume because of two primary reasons. First, it will allow us to introduce more products in segments where we are already strong. So we will be able to cover the market even more comprehensively, ensuring that we continue our strong dominant market shares in those price segments. But there are price segments, particularly in the 1 to 1.25 lakh rupees where including the price of our propa. Today we practically don’t have a product. We believe EL will allow us that white space entry and some and a healthy market share gain.
All of which is new and incremental and not even real cannibalization. So we expect volumes to come on volume expansion to happen because of these two approaches.
Nitin Arora
Thank you. Very helpful. Thank you.
operator
Thank you. Next question come from the line of Vijay Pandey from Noama Wealth Management. Please go ahead.
Vijay Pandey
Thank you for taking my question and congratulations for an excellent quarter. I have a couple of questions and one was on our gross margin. So basically I wanted to understand how our bill of material has moved from FY24 to 25 to right now. What is like as a percentage of total cost or total vehicle cost and what is and how much is the battery price of that component?
Tarun Sanjay Mehta
Right. So Vijay, we’ve, we’ve shared this detail. From FY25 to YTD FY26 3/4 FY26 BoM has reduced by roughly about 8%. Roughly over 10,000 rupees. From an average weighted average BoM of 1.2 lakh rupees to roughly about 1.1 lakh 1.11 lakh rupees by now. So that same improvement we have seen fi over fi full fi to nine months. This fi. How much is the cost of battery? Well I’ll skip the cost of battery pack because that is a lot of detail. But at a cell level the total cost of cells in as a. As a function of the total bill of material is below 20%.
Now I can’t share the exact number and also honestly it depends variant to variant but it’s generally below 20% as a safe estimate these days.
Vijay Pandey
And in FY24 it was generally count.
Tarun Sanjay Mehta
The FY24 to FY25 was also big drop. FY24 it was 1.48 lakh which fell down by 19% to 1.2 lakh in FY25 which has fallen further by 8% in nine months of FY26 to 1 lakh 10 thousand rupees.
Vijay Pandey
Okay. I was actually looking for the battery as a percentage of mum cost.
Tarun Sanjay Mehta
Sorry, I unfortunately won’t remember that. I do remember that for the last few quarters the cost of battery, the cost of sales has been sub 20 but the rest I won’t be able to pull out.
Vijay Pandey
Secondly sir, I wanted to check about the software mix. So how do you see the flowers of non metal revenues? Around 13. What will be the software component of this? And are we seeing any deviation in terms of software revenues when we see consider the higher price model and the lower price model like between bits and 450s.
Tarun Sanjay Mehta
So the price of our price of Propax is generally quite similar between 450 and Rista variants. I would say without sharing exact details. Roughly about half of the non vehicle revenue or in that vicinity comes from sale of Propax.
Vijay Pandey
I meant adoption rate adoption rate of software between…
Tarun Sanjay Mehta
Quite similar. If you think about it, RISTA is the majority of what we sell. 91% is the attach rate for the product. There’s not too much, there’s not too much leeway for differential attach rates at this point. They’re quite similar.
Vijay Pandey
Okay. Okay. And lastly sir, if you can just please share give a little bit information about the Charging unit economics of the charging station because no one else does it in India. So if you can little bit share about how that profitability or how the revenue realization is coming and can we expect any profitability from that segment?
Tarun Sanjay Mehta
I’m sorry, I don’t have that information handy so I’ll have to skip that for now.
Vijay Pandey
Okay. Okay, thank you. I’ll fall back.
operator
Thank you. Next question comes from the line of Pratiti from Param Capital. Please go ahead.
Pratiti Khara
Hello.
Tarun Sanjay Mehta
Hi.
Pratiti Khara
Hello. Am I audible? Yeah, I had a question. The volume numbers that were given in the revenue, the ASP comes to around 1.4 lakhs. Am I right on that?
Tarun Sanjay Mehta
Yes, you are. We have also shared the same in our presentation uploaded online.
Pratiti Khara
Okay, great. Also one more thing. I think we’ve spoken about how LFP batteries we’ll be moving towards and that will help our gross margins. So has that happened and how do we see the gross margin improvement in this quarter?
Tarun Sanjay Mehta
LFP has already played a media role over the last several quarters and has helped improve our over the last few quarters and has helped improve our unit economics. The large part of the gain is already factored in. There could still be some upside as the variance queue evolves a little bit, but I would say the majority of that upside is already factored in.
Pratiti Khara
Okay. Also battery as a service is something that we were supposed to do. So have we started that and if. Yes, how many of the units sold out of 68,000 opted for this service?
Tarun Sanjay Mehta
You know it’s really telling that the street does not even know that the product is live. The feedback will be shared with our sales teams. But honestly we looked at BAS first and foremost as a strong marketing lever for us, which I think it’s played a okay kind of role for us. It has fairly small attached rates today. It looks like once consumers come in, they end up opting for other plans and not necessarily BAS. Also retail finance is already like more than 50% of our consumers already offer retail financing. And maybe that’s why bas attach rates are low.
Because if you are anyways opting for an EMI then you may not honestly need a base.
Pratiti Khara
Understood. Also, there has been this supply chain ban on Magnet from China. So how has that impacted our supply chain of anything.
Tarun Sanjay Mehta
That’S behind us? The ban impacted our sales in Q1, Q2, Q3 onwards. We have had no material impact because of the ban. The ban. The ban expired in October.
Pratiti Khara
Okay. So now the supply chain is back on track.
Tarun Sanjay Mehta
Yes.
Pratiti Khara
Okay. All right. Thank you so much. Congratulations on a great set of numbers.
Tarun Sanjay Mehta
Yeah. Thank you.
operator
Thank you. Our next question come from the line of Manish Otswal from Nirmal Bank. Please go ahead.
Manish Ostwal
Yes, sir. Thank you for the opportunity. I have only one question. Most of the question already you answered, sir. On export side, any strategy behave over the medium term. Can you comment on that?
Tarun Sanjay Mehta
So right now we have done a limited experiment with Nepal and Sri Lanka where we have seen encouraging results particularly with EL as a platform. We are optimistic about international markets. The longer wheelbase and the opportunity to add bigger wheels works well for certain markets. In the near term there’s not a lot to share. But if you take a few years outlook, international expansion will likely be a considerable place of considerable growth driver for us. But not in the short term, not in the Next, let’s say 12 months. Because you open up a market and it’ll take a few years to warm up and you know, start contributing.
So think of that as a more mid to long term growth lever.
Manish Ostwal
Thank you.
operator
Thank you so much. Ladies and gentlemen, due to interest of design, that was the last question for today. I would like to hand the conference over to Mr. Morali for the closing comments. Thank you. And over to you, sir.
Murali Sashidharan
Thank you. We sincerely appreciate all of you joining us today and for your continued engagement and support. And we look forward to updating you on our developments in the upcoming quarters. Wishing you all a pleasant week ahead. Thank you.
operator
Thank you so much, sir. Ladies and gentlemen, on behalf of Ather Energy Limited, that concludes this conference, thank you for joining us and you may now disconnect your lines.