Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Ather Energy Ltd. (NSE: ATHERENERG) Q4 2026 Earnings Call dated May. 04, 2026
Corporate Participants:
Murali Sashidharan — Director of Communications and Government Relations
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Unidentified Speaker
Analysts:
Kapil Singh — Analyst
Chirag Jain — Analyst
Unidentified Participant
Unidentified Participant
Kunjan Prithiani — Analyst
Vipul Agarwal — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to ather Energy Limited’s Q4FY26 results conference call. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference call, please signal an operator by pressing STAR and then zero on your touchstone telephones. Please note that this conference call is being recorded. I now hand the conference over to Mr.
Murli Shashidharan, head of Communications, 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 ator Energy Limited’s Q4FY26 earnings conference call. From the management we have with us today, Mr. Tarun Mehta, Executive Director and Chief Executive Officer and Mr. Sohel Parikh, 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 reflect management’s current expectations about the future performance of the company and are subject to various risks and uncertainties that may cause actual results to differ materially.
With that, I now request Mr. Tarun Mehta to share his opening remarks. Following his comments, we will open the forum for questions. Over to you Tarun.
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Thanks Mundi. Very exciting to be here. Good afternoon folks. Today’s call will probably be a slightly longer walkthrough as we try and summarize the entire year’s performance. Particularly as we come here at literally the eve of, very close to the eve of our listing which happened on the 6th of May last year. So first, FY26 was definitely a very massive important year for us. It was truly a breakthrough year. We originally set out to establish that on the back of a new product like Arista, Ather’s rightful market share and volumes are going to be substantially higher.
In fact, that is part of the last part of the story that we’ve gone public with. And clearly in FY26 results showed that overall volumes are up almost 66% with Q4 itself delivering 83,000 units which is almost 80% of the volume that we did just a couple of years ago. And large part of this, in fact I would say almost all of this growth is ascribed down to the new product Krista which has grown remarkably well. And today’s almost three quarters of our sales. It also improved our market share improving by about 1100 bps from about 11% from about 8% to about 18.6%.
In Q4FY26. So a fantastic growth through the course of the year. The second thing that we were confident of delivering was a new product will unlock new stores for us. And those stores can drive a fantastic growth trajectory for the business which has happened. We doubled store count through the course of the year from 351 to 700 stores by March 26th. And all of that’s been built on the back of very solid and reliable product and operations engine with R and D firing on full gear. 643 patents filed till date, with 283 patents filed just in FY26 alone.
We also launched AetherStat 7 in FY26 which had a lot of new features like infinite crews, vernacular dashboards, portal detection, so on and forth. And finally we are in the midst of our buildup of Factory 3.0 which is our new capacity, which is the largest capacity and will help us scale up our new platform later this year. Distribution was particularly growth lever that we were very bullish on. Many folks had been many investors. Many shareholders had asked us before the ipo, why not add more stores?
And we were very clear that we will add stores when they are independently viable and we will add them that on the back of a new product. Which is what we were finally able to do on the back of Rista scaling up about 8090 new stores every quarter like clockwork through the course of the entire financial year. What’s really happening is to see that large part of this store expansions happened with our existing partner. 75% of stores have opened with existing dealers. We focused a lot in the last couple of years, particularly in ensuring that our dealers have strong unit economics and strong underlying businesses.
Which is what’s translated into them adding a very large network with Ather becoming an important partner for them. Not only stores, but they’ve also added a lot of service centers. Our service centers actually have more than doubled this year. And particularly in the last two quarters, they’ve become a large part of what we’re focusing on and scaling up across the country in this growth journey. Instead of going with the plain vanilla, expand everywhere where you’re not kind of a strategy, we chosen a far more targeted approach.
We called out a zone which we call as Middle India, which are the five states of Chhattisgarh, Gujarat, Madhya Pradesh, Odisha and Maharashtra. And we had called out that we are going to focus here in FY26. We believed that given that these states have high scooter penetration, they have high share of premium Scooters and Ather’s brand equity is actually decent. Middle India can start behaving very much like South India where Ather has historically always done well, well. So we bet that middle India can be taken to a South India kind of performance very quickly.
We put a lot of our eggs on this basket or doubling down in marketing, doubling down in distribution. So for example, in the doubling of stores last year, middle India got the highest share of new stores with 125% EC expansion, store expansion year on year. And that’s led to almost unbelievable result where middle India which was at a 4% market share at the start of FY25 today has more than quadrupled market share for Ather to 17.3%. Rest of India has done well going tripling its market share from just under 4% to 12%.
And even in south where we’ve added 80% more stores, we have seen a market share growth from 13% to 23%. This strategy of adding a new product which expands addressable market and then adding new stores on the back of that larger tan is something that I think paid the most clearest results possible in the middle India zone for us. So if you see our slides, we’ve added a couple of slides to make this point. Gujarat and Odisha were two states where our estimate was that 8th and has decent brand equity but is lacking the right product.
And something like Rista can really unlock market share for us, which is what happened introducing Rista in Q2FY25, our market share tripled in a matter of just few quarters from 4% to 14% in these states. And then on the back of this really strong response we were able to unlock a lot more new stores. And those stores took us further upwards from 14% to 19% and almost 20% market share. In effect, the states of Gujarat and Odisha today are almost behaving like any other south Indian state for ether today, newer places, newer states like Madhya Pradesh and Chhattisgarh for Ather and fiercely large, fiercely completely large markets like Maharashtra.
The story has been a bit different, but we took the same leap given the strong performance in Gujarat and Odisha. We started adding stores here really rapidly post Rista and we have seen a very similar trajectory. We’ve gone from about 8% market share to 16% plus market share. And we do believe that there is a lot more headroom here particularly as we are able to unlock much more supplies in the coming quarters. Rest of India has done incredibly well for us too, ending at about 12% plus market share.
States like Rajasthan, Punjab have done and Himachal Pradesh have done incredibly well. And even Bihar and Uttar Pradesh are about to enter double digit market shares for Ether, unlocking large potential markets. Particularly as we build up our markets for EL later this year. South is a little of a surprise for us in how it’s expanded, frankly, given that south is the most penetrated EV market and
Kapil Singh — Analyst
One with
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
And it’s also the largest EV market, we frankly expected South’s growth to be considerably lesser than the rest of the country and which is what happened for a large part of FY25 and even till early FY26. So our focus was frankly on capturing market share and getting to 2025% market share as soon as possible. But the last few quarters have completely surprised us because south has actually grown as fast as the rest of the country. Basically the most penetrated and the largest EV market has also grown the fastest.
And hence we’ve been basically. The performance of south has to be seen from the perspective of a really fast growing market. Which is also why our EC count, our store count has been increasing really rapidly. The market is just becoming deeper. So our quarterly sales have gone from about 27,000 units in a quarter to about 41,000 units by the end of Q4 and we’ve been able to broadly maintain our market share. We do believe even now that the rightful market share for south lies even higher and we need to unlock more capacity, more supplies in the zone in the coming quarters.
All of that takes us to unit economics. Unit economics. We have ended FY26 at a great place, improving our AGM by about 5 percentage with subsidies up from 19% to 24%. Without subsidies, margin improvement has been even sharper from 12% AGM to 21% AGM. And this has been driven by a consistent reduction in COGS which reduced by about 9 percentage through the course of FY26.
Unidentified Speaker
This was supported by very strong performance by EtherStack and ProPax. Honestly, completely, completely betraying completely against our expectations
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
As you will see in the slide that we have uploaded, even as our quarterly volumes have really compounded up from 43,000 units to 81,000 units. Propa tax rates not only have held steady, they’ve actually gone up with Q4FY26 being the highest ever Propa rate in 93%. This has definitely and certainly helped our margins and has really helped differentiate the product and the business
Unidentified Speaker
Charging infrastructure,
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Has played the role of a really differentiated ecosystem experience and has deepened the moat. We now have more than 6,000 fast charging points on the next standard across the country. And in the recent years the number of charging sessions on public fast charges has compounded faster than the total number of charges, which is a really positive thing for the underlying unit economics of these fast charges. One that already obviously has had positive uneconomics and we believe will have a line of sight of positive EBITDA as a standalone business in the coming years too.
All of the scale for charging infrastructure has also been built on the back of lex, which is the charging protocol that ATHER has now created. It no longer is the ETHER charging standard, but it is an Indian charging standard. And we’re very happy to report that it’s no longer just the Ather that is using it. There are more than 20 plus stakeholders of OEMs, CPOs and suppliers and providers who joined the new newly created consortium called leaf, which is now pushing this as not just a national but also soon an international charging standard finally coming to EBITDA.
So all of this is translated into strong EBITDAs. We work on vehicle, the work on software, the work on all ecosystem products together. And the EBITDA improvement is where the story is hands on the sharpest. We saw more than a 1500, 1600bps improvement in EBITDA losses from FY25 to FY26,
Unidentified Speaker
With Q4 being
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
An incredible 2000bps improvement in EBITDA losses, with EBITDA losses coming down from 23% to about 23% to about negative 2%. So a very sharp improvement. This has been possible because EBITDA has enjoyed two advantages. One, continuously improving unit economics. B also very solid operating leverage, about 3/4 of the cost below gross margin is fundamentally fixed in nature and hence the operating leverage has been very powerful and in a very strong translation of all the gains built upwards of that.
Unidentified Speaker
FY26 was not without challenges,
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Particularly supply chain challenges have been building up through the course of the year. What hit us were three big things, which is rare earth magnet crisis, the spike in memory costs across the entire world and the spike in lithium ion battery prices because of commodity inflation. What we did was a lot of work in strategic sourcing, pre buying and inventory planning, which is what allowed us to sidestep or at least push out a lot of these hits in FY26 engineering for alternate technologies, for example, like LFP, which allowed us to mellow down or even again buy a way out of the spike in lithium ion battery prices overall and definitely obviously the continuous work in alternate technologies and product led Design changes which was the constant DAV work that delivered the overall cost reduction that we’ve seen till date.
But this is not the end of it. We are living in an extremely volatile macro as we are aware and we do expect the impact to be there in the short term. We put out some content this time. We spoke about it during Q3 results. Also we expect the hit on not just the supply of material, but now also the cost of all raw materials to remain inflated for a while. While the current commodity costs are obviously crazy and we don’t expect this to be new normal for our industry going forward, it is also true that in the short term the inflation is real and will be here with us, which means there will be a pressure on margins, one that we will try and mitigate as much as possible with price hikes and even more work on things like accessories and software, but they can’t be fully mitigated.
So expect a short term impact on margins. But the silver lining in all of this cost pressures is that commodities eventually will find their natural level once again. And every time a business like ours will go through this kind of a phase, it emerges out much more stronger. We saw this during FY23 when the buildup of pressures of reducing subsidies created a climate which led to the birth of ATAS propa business model and the entire ether stack approach. We believe the entire spike in commodity prices, which we hope will be short term will end us up with better cost structures, better margin structures, better price structures which will survive the elevated prices today and will land up in an even better than estimated eventual cost structures in the long term.
And one big thing that we’re excited about, which will also help by the way with the cost structures and particularly sidestepping really expensive commodities, is our upcoming scooter platform elite. We spoke about EL in FY26 unveiling the platform and a few concept vehicles on it in the last ather community day in August last year. Just a quick recap. It’s an extremely versatile
Unidentified Speaker
Platform focused on safety, convenience and design with cost in mind. It comes with a lot of significant technology upgrades like the Ether Charge drive controller which brings onboard charging reducing the size of the charger.
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
It comes with larger wheel sets. It comes with latest. It comes with a new technology called AEBS Advanced Electronic Braking System. A technology that mimics an ABS like braking experience in a large percentage of the same safety scenarios at a fraction of the cost of traditional ABS technology. So all of this goes live in ABs in EL later this year. It also has a substantially better cost structure because it’s been designed with this cost in mind, particularly moving away from aluminum frames to steel frames and a much simpler transmission system.
The expectation that we have is if you see the overall E2 Wheeler market today, there are broadly four categories, four price segments. The way we see the market there is the entry segment which is below a lakh rupees ex showroom price. Then there is the mass segment which is from 1 to 1.25 lakhs. Then there’s the mass premium segment where ether operates heavily today from 1.25 lakh to 1.5 lakh rupees. And then there’s the premium segment which is greater than 1.5 lakh, where Ather absolutely dominates the market, particularly with the 450 product line.
If you see the larger market, particularly with the key five players, our competition, our peers have a lot of variance in increasing order as the prices come down. So they will have four variants in the premium segment, six in the segment in mass premium, 12 in mass and 10 in the entry segment. While Ather has a completely inverted pyramid with six variants in the premium segment, three in mass premium and none in mass or the entry segments. Our understanding is that the mass segment of 1 to 1.25 lakh rupees is the largest chunk of the EV market today.
Electric two wheeler market today and with EL we are particularly targeting this segment. In fact, EL will play a dual role in our expectation. It will give us the opportunity to expand margins with less dependence on really expensive commodities like aluminum, even reduced copper
Unidentified Speaker
And considerable cost reduction. Fundamentally with how we define how we design this platform, we believe yield products and variants will improve
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Our margins in the premium and mass premium space while giving us really, really viable products in the 1 to 1.25 lakh rupees space where Ather does not have any presence today. In fact, this is one of the cleanest product introductions one can imagine because you’re talking about adding a product in a segment in a price segment where Ather literally does not play and operate today, giving us a large upside with very limited cannibalization concern overall. So that’s the reason why we’re excited about EL and work is on in full swing and and we expect Yale to be commercialized and in the field before end of this year and to scale up Yel and obviously talking about production because I’ve already hinted that we are supply constrained comes our next big topic which is factor 3.0 in Chhatrapati Shambhaji Nagar this is our largest factory till date.
Planned for a 10 lakh total capacity with 5 lakh capacity going live in phase one itself. Expecting commencement of phase one by end of this calendar year. Q3FY27 this plant, apart from it driving the bulk of EL’s growth in the coming quarters, it also will help unit economics because it has higher vertical integration than what Ether does today with battery pack assembly, transmission assembly, painting, electronics assembly and CED coating coming in house. It’s also in a really vibrant supply ecosystem with Aurangabad, Chandragiri and Bhajanagar itself being a really really large and active supplier base.
And also it’s inside a park which has now become a really large EV OEM geography ADA was probably one of the first ones in the EV world to go into Orec. But since then we’ve seen really many several large names also announcing the plants here. Which really gives you a lot of confidence for the future of this plant and this entire geography. It will also long term help our logistics cost because we expect Middle India to remain one of our largest and most important markets followed by North India, particularly with el.
So scaling up EL production out of Orec will be an important part of our operation strategy in the coming years. Coming to marketing, we get a lot of these questions and used to get a lot of these questions particularly during the IPO journey that why don’t we invest more in marketing? So we have in fact Q4 you will see slightly higher other expenses partly driven by an increased spending on marketing and not just plain mail spending. Our marketing has been evolving very strategically with clear growth pillars.
Clear pillars on which we will build our strategy on the first pillar which we spoke and we’ve already acknowledged, already highlighted over the previous quarters was the Ziadamat Socho Ethelelo campaign which is going to become a long term pillar driving assurance in the market, particularly in North India. But the latest pillar which we went live with in Q4 is our new campaign called It’s Easy on an Ether. This is the marketing led that really focuses on why our products deserve a premium, why Ether’s experience remains the only real magical experience in this market.
Highlighting experiences like skid control, super fast charging, the really accurate range prediction, so on and forth. This has become an important part of our marketing strategy overall. All of it culminated with Ether becoming in quarter four the number one searched EV brand across the country. A thing that we are finding that we are incredibly proud of, particularly given the fact that we are still some distance away from becoming number one in volume. It really hopefully pertains to where Ather’s brand equity today already is.
Chirag Jain — Analyst
Not only in searches, we saw very healthy
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Increases across the board. Our internal brand track interview suggests that our awareness has gone up almost 100% up over the course of the previous 12 months. From December 24 to December 25, our consideration scores have gone up 31%. And finally the most important criteria, which is preference, has gone up by a solid 50 percentage. So incredible results are already focused and strategic marketing, investment and campaign over the last one year. And this has been happening in the context and the backdrop of an incredibly fast growing EV market.
Now one question that probably every analyst has asked everybody in this industry over the last one or two years is that why is the EV market not really growing fast? And I think over the last three, four months, five months, that’s starting to change quite massively. We’ve shared some data for everybody’s consumption. If you look at EV category searches, we have surged 140% from Q1 to Q4, FY26. If you see the overall volume, the volume growth has been fantastic, particularly in the last couple of quarters.
We’ve been highlighting this for the longest time that the EV industry has actually been growing incredibly well. It was the abnormal growth of the sub 1 lakh rupee industry and its eventual decline that kind of hid the fact that products priced above have been actually growing incredibly well for years now. And now that the sub 1 lakh rupee category has settled at a more sustainable level and is in fact also starting to grow and you see the compounded growth on top of it of the greater than 1 lakh rupee category, you’re seeing both these growths add up together and which is why finally the industry growth has become visible even to an outsider.
We believe this trend will continue and particularly with the current macro,
Unidentified Speaker
We believe electric vehicles will
Tarun Sanjay Mehta — Executive Director and Chief Executive Officer
Continue to find even more favor with the consumer. And ultimately it’s the consumer who will vote with their wallets and will continue to buy more electric. With that, I am at the end of my section. I think we can open it up for Q and R. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may enter STAR and one on your touchstone telephones. If you wish to remove yourself from the question queue, you may enter Star and 2. Participants are requested to use only handsets while asking a question. The first question is from the line of Krupa Shankar from Avendus Park. Please Go ahead.
Unidentified Participant
Good evening and thank you for the opportunity. Congratulations. My first question is on the pro pack. Just wanted to get a sense. So 93% overall attachment is quite impressive. Just want to get a sense around what would be the difference? The attached rates in newer markets like Madhya Pradesh, Uttar Pradesh, or as you call it, middle India and rest of India versus more mature markets like Karnataka and Tamil Nadu, if you can share that.
Tarun Sanjay Mehta
Yeah. So it follows. So the highest attached rates are in south India, particularly states like Kerala, where there is nearly 98, 99% kind of attached rates, followed by middle India, followed by rest of India. But to give you a sense that the gap is really narrow, rest of
Kapil Singh
India, which is our weakest zone by far, is also at 81% attached right now. So overall attachments are quite healthy. There is a trend, however, that every time we open up a new store, every time we practically open up a new city,
Tarun Sanjay Mehta
The attach rates start at much more humble level. We have seen, for example, Madhya Pradesh, like less than a year ago, was at 40, 50% attach rates. Today, Madhya Pradesh consistently does more than 80, 85% attach rates. So it takes between two to four quarters for those new stores, for those new teams, the sales teams that join us, that join ather, you know, sort of become comfortable with the idea of upselling anything beyond the vehicle. Traditional automotive comfort and wisdom and experience ends at upselling things like, I don’t know, like throttle covers and rain jackets and mats, which you’re also very proud of because that stuff has also been fairly profitable for us.
But the entire concept of selling a pro pack has been very into our industry. So there’s a little bit of a learning curve for newer sales teams, newer stores, and particularly newer cities. But within a year, they all ramp up to a pretty healthy number. So I wouldn’t be surprised that even rest of India, which is not India particularly, gets to 90% attach rate over the next couple of years.
Unidentified Participant
So given considering the fact that we have opened close to about 170 branches, the last two quarters, 93% attached rates looks quite impressive. Do you see that ramp up in the newer stores being much faster than what you had initially anticipated? Any trend around that
Tarun Sanjay Mehta
In terms of volume? Just absolute sales,
Unidentified Participant
Absolute sales with newer branches, the attached rate becoming better.
Tarun Sanjay Mehta
So sorry, I will not be able to immediately comment on the attachments. Oh, yeah, okay. So sorry. There is a one trend where if the new store is opening with an existing dealer partner, which is also 3/4 of our case, then the ramp up is certainly much faster. Because the partner is already aware about the incentives, is already except and believes in the power and hence is able to push their teams much faster. With a new partner, there will be a little longer ramp up time in terms of just sheer volumes of scooters sold.
Yes, definitely. New city, new store growth has definitely surprised us. We, I think we generally tell all our new partners that with a new format stores it will take you a couple of years to sort of get to operational breakeven and a little longer to get to actual breakeven. But reality has been much, much, much faster. Operational breakevens on average being achieved by every cohort of stores that we open in about a quarter match 2/4. So in about 2/4 they’re getting to on average operational breakeven.
And so the overall laptop journey has been very, very, very handy.
Unidentified Participant
Thank you. My second question is on the near term EV tailwind which we’re talking about. Given that you have already stated that you’re going to expand close to about 400 branches this year, are you going to see an accelerated branch opening in the first half to capitalize on this trend? Is that something which is on the cards? Can you talk a little bit more about that?
Tarun Sanjay Mehta
So we’re not giving any specific guidance for new store expansion in FY27, in FY26 because this
Unidentified Participant
Was the most important growth driver for us. We publicly put out a number because they wanted people to understand where we are.
Tarun Sanjay Mehta
For us, the big growth driver in FY27 and FY28 is going to be first and foremost EL, followed by the continuous expansion of new stores. In a sense, new store expansions becoming a little bit of BAU for us. So yes, I certainly hope that the current pace of EC opening on a quarterly basis will more or less continue, but we’re not putting out a specific guidance of new stores in FY 2018.
Unidentified Participant
Thank you for questions.
Operator
Thank you. The next question is from the line of Gunjan Prithiani from Bank of America. Please go ahead.
Kunjan Prithiani
Yeah, hi, thanks for taking my question and thanks for the comprehensive comments. In the beginning I had a few questions. I think firstly on the more near term cost headwinds that you called out. I think we generally understand the aluminum and metal really to some extent, but could you also give us some lithium? There’s been such a huge rebound on the lithium prices as well. Right. So how are we working to mitigate that? And more fundamentally, how do we think about the impact of lithium prices on the overall bomb cost?
If you can share some color on that
Tarun Sanjay Mehta
So. Thanks, Gunjan. And yeah, and actually, which is why we’ve been trying to drive awareness around this. People are never surprised. Lithium particularly was a pretty crazy commodity. Has been pretty crazy commodity going up from I think a base of $8 per kg to about $24 per kg in a very short span of time. It’s cooled down a little since then, but yeah, it is still up more than 2.5x and we’ve seen very similar trajectories from most NMC commodities. So nickel’s been up like crazy, Manganese been up, cobalt’s been up, lithium’s been up.
So all of it has created a situation where even the finished good in lithium ion cells, because the underlying raw materials have been up so much, the final price of a lithium ion cell is up quite considerably. Depending on where you buy from and when did you actually procure, prices could be up like 30, 40, 50 percentage also. So prices have been up. That’s true. Unfortunately, even producing them in India is not really unfortunately an answer because the underlying raw materials which we all import are up a lot more.
Aluminium, as we probably highlighted, is up and actually I believe will go up a little bit more given the hormones crisis. So, yeah, that’s all we’re dealing with. We believe that the overall commodity price inflation is between 40 to 50%. Obviously we should not increase the bomb by 40 to 50 percentage. The overall bomb increase is going to be fraction of it. But this is still, I think, larger than any commodity super cycle I think our industry has ever seen.
Kunjan Prithiani
And this 40 to 50% or 30, 50% that you mentioned on the lithium or the cell cost, like everything is up. Is it fair way to think that, you know, the cell in itself. Is there a number that you can give me in the sense that what will be the cell as a percentage of bomb cost? Because this number has changed over the last two, three years as the cost structure has improved. Right. So what should be the ballpark number of, you know, the battery cells, pack motor, anything that you can give, you know, that can make us think better on this.
Tarun Sanjay Mehta
Yeah. So overall sales used to be 15, 16% of the overall bomb, 20% of the bomb, until a few quarters ago. But obviously since then it’s seen a reasonable amount of spike up. So now it’s a slightly larger part of the overall build of material of the vehicle. Aluminium. There’s a fairly healthy amount of aluminum in most electric vehicles. In fact, on our current platforms, I would say the content of aluminium is comparable to that of ice which uses otherwise a lot of aluminum transmission and engines.
Something that we should be able to de risk substantially once EL comes in because it uses far less aluminium than in the past. What else? I think these are the. These are the big ones. There’s a long tail of small other precious metals which also up.
Kunjan Prithiani
Okay, this is very useful. And the second question that I had was on the, you know, on the slide 24 of the industry structure that you have on the presentation, can you give us some idea on how the market market sizes are in different segments? And what I’m trying to really get at is that what is the part of the market addressable market that Ather is currently addressing? Just a bit more on the sizing of these different price buckets that you’ve called out on slide 24.
Tarun Sanjay Mehta
Yeah, thanks. So
Unidentified Participant
For everybody’s benefit I’ll just call this out again.
Tarun Sanjay Mehta
We believe there are four price segments in the Indian market. The sub 1 lakh rupee ex showroom price is what we call as entry 1 to 1.25 lakh rupees mass, 1.25 to 1.5 lakh is mass premium and 1.5 lakh and beyond is premium. It’s hard to exactly nail down what is the size of each of these segments. But a few months ago Wahan website did put out some beta data around specific variants. So unfortunately the website is down so we are not able to refer to it right now. But the data was up there a few months ago.
If you were to study it, what it would tell you is that it looks like the premium market is between 10 to 15 percentage. The mass premium market is a little larger between 15 to 20 percentage the mass market. So basically everything 1.25 lakh and above where we play today is give or take about 25 to 30 ish percentage of the overall E2B market. By the way, this I’m only looking at the volume of the top five manufacturers. There are other manufacturers also whose volumes are not considered. While I’m talking about these indicative sizes, our understanding from that data back then was that mass market could be as high as 45 to 50% of our industry.
And the sub 1 lakh rupee segment which has shrunk is probably between 15 to 20% of the industry. Again, please take this with a pinch of salt. These were our very rough estimates from an early beta site that we saw and our field intelligence. I could be off here
Unidentified Participant
But directionally I do feel that this sounds about right in
Tarun Sanjay Mehta
The market. So what we are excited about is that EL opens up the mass market for us where Ather today. And when you look at our price points with Propa today, Ather actually has no product in the mass market at all. So we’re missing almost half of the industry. So we are excited about EL because that unlocks that entire segment to us.
Kunjan Prithiani
Got it. And last question, just going to the Delhi EV policy news which came through and it is not about what happens to that policy, but I think fundamentally if the push from the policymakers is towards EVs, I think at this point of time we are essentially just catering to scooters. So I just want to hear from you, how do you think about the viability of electric bikes? Is it possible now? And I think the fact that, you know, we are seeing significant shift or, you know, rise in inquiries for EVs, it is still cater to only the scooter part of the industry.
Right. So how do we think, how soon can electric bikes come through? Is it viable? What do you, you know, just should we see this as an opportunity or a challenge?
Tarun Sanjay Mehta
Thanks Vinj. I think the Delhi v. Policy conversation is very interesting because I believe this is the first time when we are seeing very strong signs of a strong support by almost every section of the society for EV for a clean vehicle friendly policy like this. There have
Unidentified Participant
Been previous conversations including the famous or even policy,
Tarun Sanjay Mehta
But I think they’ve had mixed support from grounds up. I think this is the first time I’m seeing in my experience where there seems to be a groundswell of support from all corners. So let’s see. But it looks like something may actually make its way to final execution this time around and I think it’s also happening. You should also see this in the context of the larger macro which is definitely pivoting towards becoming EV friendly. Now. I think this entire oil crisis has, while it’s not changed petrol prices yet and that in fact that change, if it does happen, could create an even bigger demand upside for our business and the industry.
But even without that, just the LPG crisis itself I think has put this question in the mind of every customer that maybe it is electric and electricity which is the most reliable commodity. So I’ve been joking about internally that we are hearing signs of the consumer going from if you’re buying an electric, then at least keep one petrol in the family, one petrol vehicle to well, you can have all vehicles but at least keep one electric vehicle in the family, you know, for that rainy day. So I think there’s a larger shift underway here.
Details like, you know, whether motorcycles are there or not, I honestly believe are secondary layer. And if there’s going to be a very strong pull from the market, I think we’ll all build electric motorcycles. They are not rocket science. They are definitely buildable. There’s just not been enough any meaningful proofs that establish them to be a large market yet. But when the time comes, I’m sure you will see all of us, not just startups, but incumbents alike, build a massive portfolio of them.
Kunjan Prithiani
Okay, got it. I’ll join back with you. Thank you so much.
Operator
Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead.
Kapil Singh
Yeah, hi, good evening Karan, and congratulations on a very strong performance. Firstly, I wanted to talk about industry growth itself. Any thoughts there? How should it shape up? And also for Ather, you seem to be operating in a supply constraint scenario. I think you mentioned that as well. How much can you extract from the current facility and how should we expect the ramp up of?
Tarun Sanjay Mehta
Yeah, thanks Kabil. So the current facility is running at is not still at full capacity, so I do believe there is a little bit more juice to extract out of it. But we’re definitely now on the edge and which is why we decided to talk a little bit more about Orec and the new factory in this earnings call to give everybody a little sense of how work is shaping up there. The current capacity is designed to do 35,000amonth and now multiple times we’ve been at 90 to 95% of that utilization over the last few months.
So we’re definitely running at the edge and hence it’s. Hence any gaps are very unforgiving. But kudos to all the operating teams involved to have run a really tight ship with all the constraints and hence the excitement around Oric. Orec in phase one should unlock 42,000 units a month incremental capacity, hopefully paving the way for at least another couple of years of solid growth and uninterrupted growth for us.
Kapil Singh
So by when can we expect 42,000 per month from a capacity point of view that you can extract. Oh,
Tarun Sanjay Mehta
Right. So we are expecting commencement of trial productions before end of this calendar, likely around festival, just around that timeline. And the full 42,000 should be operationalized before end of this FY for sure.
Kapil Singh
Okay, great. Second question, just following up on the cost side, can you also talk about how much price hike we have taken? Is it enough to cover the cost increase and should we expect more price hikes to come through? And also some Comments on the cost reduction. You know last year we had a very impressive run. So how much cost reduction can we expect as we go through the next year?
Tarun Sanjay Mehta
Right, so in quarter four we took roughly about 1500 rupees kind of a price hike. And in quarter one, like basically this April last month we took on a blended basis about roughly another 2500 rupees price hike. So just in this calendar year we’ve already taken roughly about just under 4,000 rupees kind of a blended price hike. We do believe the market might be okay to support a little bit more, particularly given the competitive scenario where the underlying cost structures have gone up. So we could likely look at another price hike in the coming few months.
Sorry. And sorry did I answer your questions for around price hikes And
Kapil Singh
I was looking for cost reduction as well. You know, if you can talk about what is the cost reduction targets or potential.
Tarun Sanjay Mehta
So the biggest cost reduction that’s coming ahead of us is EL going
Kapil Singh
Live. Obviously that will take a few quarters to become visible
Tarun Sanjay Mehta
In the P and L from it going live. But expect that by the end of FY27 the largest source of cost production and Cox reduction that will come in a P and L would be largely yield linked. While the current platform products which is 450 and Rista can see a meaningful more cost reduction, there will be slightly lower priority in the short term over the move to yield first. So in priority order cost reduction will come from Yale over the course of FY27 a little bit more back loaded. There will be some cost reductions that will also come on the 450 platform, particularly on Rista first followed by 450.
They may not be as large as the last two years because the bigger focus will be in operationalizing yield first. But once Yale is operationalized, I think the actual improvement will be a lot more than previous years.
Kapil Singh
Just one last clarification on slide 25 we have mentioned in the premium and mass premium segment EL to expand margins. Can you explain this? Are we going to have EL products there in premium and mass premium also?
Tarun Sanjay Mehta
Yeah, so we do see that there is a lot of potential. What we’ve been building with EL over the last few years has shaped them incredibly well. And while obviously it has a substantially better cost structure and opens up the mass market for us, what we realized is that given a DNA we’ve actually built a pretty fantastic product even in the higher price segments. One that can actually go after current RISTA price points quite aggressively. And financially we are quite immune. Whether
Unidentified Participant
There’s cannibalization between RISTA and el
Tarun Sanjay Mehta
Because
Unidentified Participant
Fundamentally EL
Tarun Sanjay Mehta
Unlocks better margins for yield. So yeah, there will be likely variants of EL even in the mass premium segment, potentially even in premium,
Unidentified Participant
But certainly mass premium.
Unidentified Participant
Okay.
Tarun Sanjay Mehta
Yeah. Just last point I want to make is I do want to like make sure everybody understands that Yale is fundamentally a platform and not just one product. So the number of variants, the number of products we can build on it, even this year, and definitely the coming years can be quite, quite large. And hence expect this platform to have products across all price segments. Well, obviously the early focus will be the mass premium and the mass segments.
Kapil Singh
Okay, since you mentioned that, let me ask whether EL is capable of having motorcycles also or for motorcycles. You need a new platform.
Tarun Sanjay Mehta
That will be a stretch too much. I will need a new platform. We call that the Zenith platform.
Kapil Singh
Okay, thank you. That’s all from my.
Operator
Thank you. The next question is from the line of people, Agrawal from hsbc, please go ahead.
Vipul Agarwal
Thank you for taking my question. So my first question is on the margin side, like understanding that current commodity cost inflation is pretty steep. Can you help us understand how is it getting distributed across Apache and assuming that obviously ether will not be absorbing the complete multi the inflation part, so how it will be absorbed across the supply chain. That is one second is on. Like how much of the commodity cost inflation in last six months has been passed on so far?
Tarun Sanjay Mehta
Right. So I would say only a small part of the inflation has been passed on till now because of, because of how we manage procurement and how we manage with stockpiling, we’ve been able to push out
Unidentified Participant
Most of the hikes till date. And honestly, if the commodities had cooled down by now, I
Tarun Sanjay Mehta
Would have not even talked about it because then you would have just managed through the rest of the year. It’s the fact that till now we haven’t seen commodities cool down. In fact, in Q1 we see
Unidentified Participant
Signs of it going up further is why we are highlighting them here. So expect the hits
Tarun Sanjay Mehta
In the coming quarters. How much is distributed? Honestly, I think given that volumes are rising up really rapidly and we are in the middle of a fast growing inflation industry and on top of it either has a fair bit of market share that it can further expand into. I believe that there is an opportunity for us to trade off some of these hikes with the suppliers. But it’s also fact that suppliers ultimately have limited leverage because it’s underlying commodity that is becoming more expensive and not the processes.
So we’re trying and we’re hoping to we are hoping to share some of the burden with the supplier but I expect the bulk will come to the company or the customer.
Vipul Agarwal
Thanks for that. One question on asp like you have taken a price pick in January and your eighth and stack attachment rate has also increased in this quarter but your ASP seems to be flat QQ in 4Q so what’s the reason here? Like ideally there has to be some increase in that. So what am I missing over there?
Tarun Sanjay Mehta
So I believe the thousand rupee change is likely ascribed down to how offers are structured in Q4, particularly the start of Q4 and some of the expansion in middle and particularly north India with especially newer stores leading to a lower asp. That trend typically tends to cool down as the tends to sort of go away. As stores age up a bit, their ASPs do tend to inch up. So I won’t read too much into it right now beyond
Chirag Jain
That, is there anything. I think that’s. That’s pretty much it.
Vipul Agarwal
So you can expect some increase in ASP in coming quarter before we launch. Before you launch the EL platform. That is would be a fair understanding
Tarun Sanjay Mehta
Asp. So actually also just to highlight this is just a reminder what you see in our financials is our realization. So which will obviously whenever the famed subsidy expires over the next few months take a 5,000 rupee hit because that incentive will go away. But if you see ASP as the ex showroom average price in the market then that will continue to inch up because we’ve been taking very disciplined price increases every few months.
Vipul Agarwal
Another question is on other expenses like you talked about increase in marketing spend but your other expenses was up by around 34%. So is this something that has to do with the new plantation or just the marketing expense or something else is also there
Tarun Sanjay Mehta
Actually because warranty and outbound logistics. It’s a warranty. Logistics sits. I can hear me.
Vipul Agarwal
Yeah, I can hear you.
Tarun Sanjay Mehta
Okay. Because warranty and logistics sits in other expenses and that’s technically practically actually a variable expense. Given that volume sold was up 23% compared to the previous quarter. That number definitely went up. So that’s, that’s a considerable part of apart from marketing what went up this time.
Unidentified Participant
So basically Vipul, the warranty cost also is calibrated if you recall in the last year’s earnings call we do a calibration at end of the year. So that adjustment is also reflecting and when you’re doing a provisioning for warranty, you want to be a little conservative with the commodities prices shooting up Right. So that is the calibration that we have done. So with the. The increase that you see in the other expenses over Q3 is the combination of marketing and warranty.
Vipul Agarwal
Just one last question on the depreciation part. So my understanding, correct me if I’m wrong there understanding was that it should have increased with the launch of EL platform but it has increased on a sequential basis in fourth quarter only. So is it because of the new plant or what is the reason behind increasing depreciation in fourth quarter?
Unidentified Participant
So for the depreciation let me give a larger context for the entire year because that will explain the entire movement as well. So there are three things. One is the Ather 450 platform as a platform. So today the 450 product and Vista product is built on one single 450 platform. El is a separate platform just like that 450 is a separate platform. In our books it has a useful life of seven years and now that platform is amortized and depreciated. That is why it is sitting in the depreciation line.
Of course we continue to build and do enhancement on that platform going forward also. But from an accounting provision point of view the platform life was ascribed as seven years and that has gone into depreciation. Then there is a because of increase in terms of volume that we do out of the existing plant at Khosur. And slowly as the ramp up is happening and as we keep on doing more and more production over the. Over the. Which has actually happened. If you see the Q2 to Q3 to Q4 we have started operating multiple shifts so we move from a single shift to dual shift to a triple.
So the depreciation is also will also follow that suit. And again at the end of. So that is the second point. Third is the useful life calibration which happens across various tools, jigs, platforms because you are doing more shots and that is why the useful life has to be calibrated based on the actual usage. So this is the entire depreciation charge is a combination of that and EL is still in the development phase. So once so the amortization for EL as a part of the entire platform and the amortization will come in next financial year once we do the startup production.
Vipul Agarwal
Thanks for detail answer. That’s all from my side.
Operator
Thank you. The next question is from the line of Pooja Seth from yes, securities. Please go ahead.
Unidentified Participant
Hello.
Operator
Yes ma’. Am.
Unidentified Participant
Thank you and congratulations. I just want a clarification on the other financial assets in the current asset because I See that it was increased too much. So can you throw some lights over it all increased so much.
Unidentified Participant
So that is largely the fixed deposits or the term deposits as we call it, which is the IPO money sitting there.
Unidentified Participant
And is anything because of the EB subsidy receivable that we used to get?
Unidentified Participant
Yeah, that. That also sits here. But that’s a very nominal sum because all the, all the frame related incentives or the PME drive is coming in regularly. Only the Maharashtra state subsidy, which is something new which got introduced in the recent months. So that is a very small amount which is reflecting in the other financial assets. But largely most of it is the term deposits or the FDS as we call it.
Unidentified Participant
Okay, okay. And another question is we are going to launch a new product in the ES platform. So it is still the same this such a season. We are going to see those models?
Tarun Sanjay Mehta
Yes, most likely.
Unidentified Participant
Okay, thank you. We’re
Tarun Sanjay Mehta
Not giving exact month of launch for obvious reasons because we can’t. We don’t want to. We don’t want at this stage. But we believe that this festive would be a good timeline for the products to come out.
Unidentified Participant
One more question. Do you guys fit in any kind of supply issue? Because some of your competitors facing so any kind of supply issues you guys are taking.
Tarun Sanjay Mehta
We had actually the biggest challenge is trying to ramp up as quickly as the market is ramping up. Over the last few months they’ve been localized challenges in supply ramp up. For example, in November, December, there were particular variants which were becoming really fast growing in the market for which we had some constraints. We’ve come over that and you’ve seen seeing increased supply and sales every month. But frankly retail demand has been running higher than estimate. So for example, in Q4, while wholesale is what it is, retail was actually a little higher.
And retail I’m seeing what dealers have already sold to customers even if they’re pending registration. So retail number was higher, which is actually quite a crazy stat because Q4 is also the quarter when you need to dial up your wholesale quite materially because in December you cleaned up the channel stock quite a lot. So we’re not able to. We are definitely ramping up. Even in April there was a little bit of a specific challenge given the election season and the disruption to labor there. But looks like that’s also behind us.
So more localized challenges, not like a secular, not like we are not able to access materials, but squeezing more out of the current capacity until the next capacity goes live.
Unidentified Participant
Okay,
Tarun Sanjay Mehta
Also sorry, last point also we. We’ve been Trying to secure material as so one big true north for us has been secure production, secure supplies at Almost all cost. Big 2 North for supply chain for us has been de risking on technology, vendor and geography which is how we brought in lfp, nmc, nca which is how we’ve been, you know, working. We’ve been adding more and more suppliers to every single component. But things like memories for example, we don’t mind paying a little bit more if it allows us to secure long term more capacities and which is probably avoided some, which has helped us avoid some disruptions that otherwise could have hit us.
So I do want to call that out because we’ve invested actively towards it
Unidentified Participant
Recently we have started phase one in capacity that we are going to set up so when we can start the top lines coming from there
Tarun Sanjay Mehta
Before enter this financial year, most likely Q4 from the new factory.
Unidentified Participant
Okay, thank you,
Tarun Sanjay Mehta
Thank you,
Operator
Thank you. The next question is from the line of Chirag Jain from NK Global. Please go ahead.
Chirag Jain
Yeah, good evening. So Praveen, you didn’t mention about the macro tailwind with respect to EV demand. Have you noticed any major difference in the customer profile over the past few months in terms of maybe more share of first time buyers or any regional disparity which gives contribution confidence that the current EV demand momentum could be sustained or probably we could see an acceleration in terms of EV adoption.
Tarun Sanjay Mehta
I would say it seems like the demand is becoming more mainstream in nature which is also what’s helping us go deeper and deeper in the country today. It has present across 500 cities and I was looking at this data a few weeks ago, our growth and market share in tier 3 cities is right now higher than tier 2 cities, very funnily so. Well obviously that presents us with an obvious opportunity to grow further in Tier 2. But it also tells a really, really, really happy story that demand is not just in the tech forward markets, but across the length and breadth of the country.
So we’ve been definitely seeing this, we’ve been seeing this build up continuously last few months. We have seen a little bit of isolation of this trend. We’ve also seen a higher comfort for paying for more assurance. So products that end up even internally in our portfolio, products that communicate more assurance seemingly are finding more and more buyers. For example, our ATI battery warranty product has been selling really well. We are seeing really strong demand and every time we communicate assurance in the message, we see strong, strong traction which is also really symptomatic of a market that’s becoming more mainstream where assurance becomes a very important part of the reason to buy or reason to buy a specific brand.
Chirag Jain
Understood. And you discussed about propaq. Can you also discuss in terms of how the other non vehicle revenue stream has stepped up over the past, let’s say a few quarters or years and probably how one should see going ahead and how that would support the overall profitability.
Tarun Sanjay Mehta
So there are four streams of revenue in non vehicle. First you’ve got the Propak followed by the service revenues, followed by our accessories division and finally followed by the charging infrastructure division. So right now we are only sharing trends for the propacks. I did have this stat available but we just figured we’ll talk about it later. One thing that’s been accelerating really fast has been our accessories division where the revenue per unit has been growing really really rapidly in the last few years.
It’s I think grown more than 3040 percentage. So it’s still on the scheme of things it’s still like a sub 100 crore P&L but it’s growing well and at some point in the coming few quarters we will try and bring some visibility onto those other PNLs also.
Chirag Jain
Okay, thank you. Thank you so much. That’s it from my side. Thanks
Tarun Sanjay Mehta
Viragh.
Operator
Thank you ladies and gentlemen. That was the last question. I now hand the conference over to Mr. Moli for closing comments.
Murali Sashidharan
Thank you everyone. We appreciate all of you joining us today and for your continued engagement and support. We look forward to updating you on our developments in the coming quarters. Wishing you all a pleasant week ahead. Thank you.
Operator
Thank you very much on behalf of Ather Energy Ltd. That concludes this conference call. Thank you all for joining us and you may now disconnect your lines. Thank you.