Ather Energy's first profit was Rs 1.26 crore. Here is why it matters more than the number

Ather Energy made a profit of Rs 1.26 crore last quarter. For a company valued at nearly $7 billion, that is a rounding error with a press release. The market briefly added 18% to the share price anyway. The market was right, and the reason is worth understanding if you run a startup.

The numbers

Ather posted a net profit of Rs 1.26 crore for the September quarter, against a loss of Rs 154.07 crore a year earlier, The Economic Times reported. Revenue from operations rose 63% to Rs 1,464.24 crore from Rs 898.88 crore. The profit came about 17 months after Ather listed in May 2025 at Rs 328 a share. On the Monday of the results its shares closed at Rs 1,574, about five times the listing price.

The stock rose as much as 18% that day, Business Standard reported. In the June quarter Ather had lost Rs 51.09 crore. Business Standard also noted that the company raised money during the quarter through a qualified institutions placement, a preferential issue of Rs 200 crore and convertible warrants worth Rs 1,000 crore.

Profit, with an asterisk the CEO added himself

It was also Ather's first EBITDA positive quarter, with margins at 4.9% against minus 9.6% a year earlier, Inc42 reported. Excluding other income, though, the EBITDA margin was roughly 0.8 to 1%. Adjusted gross margin improved to 24%.

CEO Tarun Mehta was careful on the earnings call. He said Ather was not yet out of the woods and that the focus was capacity, not profit after tax. Commodity prices for aluminium, copper and plastics hurt gross margins by 9.4% in the quarter, and price hikes covered it. Mehta said roughly 5.3% of the margin gain over two quarters was broadly structural. The rest came from what he called temporary levers, trimming SKUs and pulling back incentives, which he said the company may open up again if supply or commodity pressure eases.

That candour is useful. A founder who labels his own temporary gains as temporary is giving investors fewer surprises later. It is also a rare sight on an earnings call.

The real problem is supply

Ather says it cannot make scooters fast enough. "Pre-orders are up 108%, registrations are up 60% and production is up 45%, all year on year," Mehta said, according to Inc42. The company sold 33,000 units a month in the previous quarter, and internal estimates pointed to 20,000 units a month of unrealised sales.

So the plan is to spend Rs 122 crore adding 2.25 lakh units a year across Hosur in Karnataka and the upcoming AURIC plant in Maharashtra, taking installed capacity to 11.4 lakh units by Q2 FY28. Hosur adds 6,000 units a month this quarter. AURIC goes live only in Q4 FY27.

The product strategy is quietly clever. Konarc, the mass market scooter aimed at petrol scooter buyers, is a few thousand rupees cheaper than Rizta like for like, and management expects its margins to improve by about 6 to 7 percentage points against Rizta. Ather launched the mid level Konarc variants first and is holding the cheaper SR1 variant until AURIC is online, so a low margin model does not eat into demand for products it already cannot build enough of.

What founders should take from it

A few lessons sit inside this quarter. First, pricing power is a strategy. Ather raised prices into strong demand and the market accepted them. Second, product sequencing matters as much as product design. Launching the cheap variant later protected margins while the factory caught up. Third, investors reward the direction more than the size. A profit of Rs 1.26 crore is small, but it is the first time the line points the right way.

The contrast with the rest of the listed EV pack is sharp. Inc42 notes that Goldman Sachs recently downgraded Ola Electric to sell, citing its difficult path to positive cash flow.

There is a wider debate here too. Core Memory reporter Ashlee Vance recently asked why Indian VCs are "so afraid to take risk and make money," setting off an online argument about deeptech, The Economic Times reported. He held up Ather, valued at nearly $7 billion, as the kind of company Indian investors overlook. This quarter does not settle that argument. It does give one side a better slide.

Ather's demand numbers came from registrations and pre-orders, which is to say from real buyers making real decisions. Founders who learn to read that kind of signal on the ground tend to build better. That is what the FIELDWORK fellowship by Earth5R teaches, through hands-on user research and field research with real people.