In distribution rampup, Ather eyes hundreds of cities where competitors already present

Time of India

13-05-2025

New Delhi:
Ather Energy
has begun beefing up its distribution network and number of service centres across the country, as it looks to gain market share against legacy heavyweights. It has been no secret that the legacy players, Bajaj Auto and
TVS Motor Company
, started with a disadvantage in the electric two-wheeler (e2w) market with single product portfolios when electric first manufacturers were ruling. But both the old timers have since raced ahead to command about a fifth each of the e2w market, largely on the strength of their distribution and servicing muscle, coupled with some pricing actions.
So, Ather's resolve to open hundreds of stores in new cities across the country this fiscal seems a step in the right direction. Ather's all-India market share in the March quarter of FY25 was 13.3 per cent, making it fourth in the pecking order behind TVS, Bajaj and Ola.
In the single quarter, we added almost 86 stores, taking our total store count to 351... Overall for the full year, our store count was up 69%.Tarun Mehta
Speaking to analysts after the FY25 results, executive director and CEO
Tarun Mehta
said that Ather had 351 stores at the end of the fiscal year, of which 30 per cent were added in the March quarter alone. And the company now has the capacity to add two new stores per day to its network.
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'Post Rizta's introduction in Q2 (July-September 2024) and its success by the festive where we saw nearly 100 per cent growth over previous festive, we started adding stores at a rapid pace and our distribution was up almost, I believe, 30 per cent in the fourth quarter. In the single quarter, we added almost 86 stores, taking our total store count to 351... Overall for the full year, our store count was up 69 per cent. Today our operational capacity is up to adding almost two stores per day,' Mehta told analysts after the FY25 results.
In a recent call, TVS said its e2w iQube now retails across 950 dealerships and the company can expand the distribution network further. CEO K N Radhakrishnan said that TVS wants to 'systematically expand in every market' since iQube was doing well. So Ather has some catching up to do with the number of stores at roughly a third of TVS' network and both companies resolving to expand the network further.
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Mehta, meanwhile, also spoke of competitive intensity on the distribution network by saying that 'our peers have been operating at 700, 800 stores. Obviously, there are really press releases of even higher numbers that you would have seen…So as we start getting into those hundreds of cities where our competition was present in the past, but we were not…I believe there is a lot of urgent volume for us to tap into.' And not just expanding distribution, Ather has also underlined servicing of its products, with Mehta speaking about starting the '
Ather Gold Service Centers
' last fiscal. 'These are service centers where we bring higher discipline, higher process discipline, better manpower, better training, better turnaround times overall. So, we launched them, and I think we've scaled up to maybe about a dozen or approximately something in that range, service centers across the country,' he said.
Post Rizta's introduction in Q2 and its success by the festive where we saw nearly 100% growth over previous festive, we started adding stores at a rapid paceTarun Mehta
Profitability:
For the year ending March 2025, Ather's total income was up 29 per cent to ₹2,305 crore (₹1,789 crore), adjusted gross margin was higher by 2.7 times at ₹428 crore and EBIDTA improved by almost 1300 basis points to -23 per cent from -36 per cent. Net losses were lower by almost a fourth, to ₹812 crore (₹1,060 crore). Mehta highlighted the 'strong' improvement in gross margins and showed the path to profitability by focusing on the new EL platform products, transition of the company to LFP battery packs with lower cost architecture, overall value engineering and the new production facility in Maharashtra. He also pointed out that Ather has never been 'a discount-led brand or a very, very marketing-pushed brand. So, while marketing will continue to be strong, but on a percentage basis, that should also see a downward trajectory. So, I think very strong levers for operating leverage in the coming quarters, which will hopefully get us to profitability soon.'
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While targeting costs, Ather is also in the process of expanding its product portfolio. The company has already said that it is working on a low cost scooter platform called EL and an electric motorcycle is also under development. More Rizta variants may also be in the offing.