Whalesbook
### NIIF Initiates Stake Sale Amidst Operational Gains
The National Investment and Infrastructure Fund (NIIF) is reportedly looking to offload up to 1.92% of its stake in electric two-wheeler manufacturer Ather Energy Ltd. The proposed block deal, estimated at ₹533.5 crore, is priced between ₹705.7 and ₹727.55 per share, with a floor price set at a discount to the prevailing market valuation. As of February 9, 2026, Ather Energy's shares were trading around ₹725 on the BSE and NSE. This divestment by a significant investor occurs as Ather Energy achieves critical operational milestones, signaling a potential pivot for institutional investors seeking to realize gains.
### Q3 Performance Signals Path Towards Profitability
Ather Energy demonstrated a strong financial turnaround in its third quarter, reporting a net loss of ₹83.6 crore. This represents a substantial improvement from the ₹197.6 crore loss recorded in the same period last year and a narrowed loss from the previous quarter's ₹154.1 crore. Revenue for the quarter saw a 50% year-on-year jump to ₹953.6 crore, up from ₹635 crore, fueled by a 50% increase in unit sales to 67,851 vehicles and a growing contribution from non-vehicle revenue streams like software subscriptions, which now constitute 14% of total revenue. [cite:Original News, 18, 37] The company's Adjusted Gross Margin (AGM) saw an 111% year-on-year increase to ₹251.3 crore, with AGM excluding incentives improving to 23% [cite:Original News, 37]. Furthermore, EBITDA losses reduced to ₹72 crore from ₹140 crore in the prior year, aided by improved unit economics and cost management. [cite:Original News]
### Competitive Landscape and Sector Headwinds
Ather Energy's market share expanded to 18.8% in Q3 FY26, with its highest-ever quarterly volumes [cite:Original News]. However, the competitive landscape remains intense. Ola Electric, the largest EV manufacturer by volume, holds a significant market share, although its recent financial performance in Q3 FY25 showed widening losses and declining revenue. TVS Motor's iQube continues to perform strongly, crossing 8 lakh sales by December 2025 and leading January 2026 sales with a 28% market share. Bajaj Auto's Chetak e-scooter has also seen a strong rebound, with a 70% sequential volume jump in Q3 FY26 and a 500 basis points market share gain QoQ, contributing significantly to Bajaj Auto's record quarterly revenue and profitability. The broader Indian electric two-wheeler market is maturing in 2026, with affordability and improved technology driving adoption. However, potential headwinds loom, including volatile commodity prices for aluminum and copper and uncertainty surrounding the continuation of government subsidies like FAME and PM E-Drive beyond the current fiscal year.
### The Forensic Bear Case
Despite significant revenue growth and narrowing losses, Ather Energy remains unprofitable with a net loss of ₹84.6 crore in Q3 FY26 and a trailing twelve-month net loss of ₹651 crore. The company's valuation metrics reflect a substantial premium, with a Price-to-Book ratio around 10.3x, indicative of a speculative market valuation. Its Return on Equity (ROE) and Return on Capital Employed (ROCE) remain deeply negative, showcasing challenges in generating adequate returns on invested capital. Long-term debt has increased, and while its debt-to-equity ratio is manageable at 1.5, rising liabilities necessitate careful financial stewardship. Competitors like TVS Motor and Bajaj Auto, with their established manufacturing prowess and brand equity, present formidable competition. Furthermore, any reduction or withdrawal of government incentives could significantly impact demand and pricing strategies for Ather Energy, especially given the increasing volatility in raw material costs for vehicles.
### Future Outlook and Analyst Views
Ather Energy's strategic expansion includes plans to reach 700 experience centers by the end of FY26, aiming for sustained market penetration. Analysts have provided price targets, with an average prediction of ₹838.17, suggesting a potential upside of 19% from current levels, indicating a degree of optimism among some market observers. The company's ability to navigate subsidy changes, manage commodity price volatility, and maintain its growth trajectory while inching towards profitability will be critical factors for investors to monitor in the coming fiscal year.