Ather's operating profit turns positive on a margin lever tied to its scooter shortage

Ather Energy, which makes electric scooters at Hosur and is bringing up a new factory at AURIC in Aurangabad, reported a net profit of ₹1.5 crore for the September 2026 quarter. The more telling figure sits higher up. Operating profit, what is left from sales after the cost of making, selling and running the business but before depreciation, interest and other income, was ₹11.6 crore, or 0.8% of sales. It is the only quarter of positive operating profit among the eight shown in the tables below.

The walk from that operating profit down to the net figure shows how thin the quarter was. Depreciation and interest together cost ₹72.8 crore. Other income of ₹62.7 crore covered most of that bill, and with no tax charge the company ended slightly in profit. Take the other income away and, calculated from the reported figures, the quarter would have shown a loss of about ₹61 crore. The distinction matters because in August the company had already described the previous quarter's EBITDA as positive; that measure counted other income, and on the filed results that quarter's operating line was still a loss.

Chief executive Tarun Mehta gave a bridge for adjusted gross margin, the company's own measure of what each scooter earns over its direct cost. Over the past half year, price increases, engineering changes and cost cuts added 5.3 points, which he described as structural, while commodity costs took away 9.4 points. Another 2.7 points came from tighter management of which variants were sold and fewer incentives.

Those 2.7 points behave differently from the rest. Mehta said to "think of 2.7% here as a lever that we will exercise in a more finite time window if we are supply constrained", and that the company would probably give the benefit back if supply or commodity costs eased. In plain terms, buyers are waiting for scooters, so Ather can sell richer versions and spend less on incentives. Applied to last quarter's sales, the lever was worth roughly ₹40 crore by our arithmetic, far more than the operating profit. Because the margin measure is the company's adjusted one, that figure is an approximation, but its size relative to the profit is not in doubt. Mehta was also firm that the lever is not a one-off, and part of the mix gain may last while demand runs ahead of supply.

The other margin levers are tighter than they were. In August, Mehta put the further commodity hit still possible at one to two percentage points of gross margin. The cumulative hit he reported last quarter, 9.4 points, implies a larger further rise than that, if both figures are measured from the same starting quarter. In May he had expected the average selling price to inch up through price increases every few months; he has since paused them, and repeated that there will be no rise this quarter, with commodity costs roughly flat so far.

Against that, the board approved more capacity on the day of the results. Extra lines at Hosur and AURIC are meant to lift installed capacity from 9.2 lakh to 11.4 lakh scooters a year by the second quarter of FY28. Management put the demand it cannot yet serve at about 20,000 units a month, a higher estimate than it gave in August. In May Mehta said the full 42,000 a month at AURIC should be operationalized before the end of this financial year. In August he said the full ramp-up could spill into the first months of FY28. He now says installation will finish by the fourth quarter and the base capacity will take two quarters to ramp up. The company is also holding back its cheapest Konarc variant until AURIC output is available, because selling it now would cost margin.

That sets the order of events for the next few quarters. More scooters should bring more sales and spread fixed costs, but the same supply that ends the waiting list also removes the condition on which the lever rests, and prices are frozen. Mehta did not present the profit as settled: "In the near term, PAT can go up and down, but definitely worth celebrating this milestone for the business this quarter."