New Delhi: Electric 2-wheeler maker Ather Energy Ltd expects its shipments to dealers across the country to suffer a shortfall of volumes worth seven days during the July-September period, as the rare earth magnet crisis will likely hit production of scooters.
The Bengaluru-based company becomes the second company after Bajaj Auto in the last four months to quantify the impact of the rare earth crisis. Bajaj Auto managing director Rajiv Bajaj has warned that August could be a zero-Chetak month if the crisis is not resolved.
Speaking to Mint after the release of the April-June financial results, the management of the company highlighted that the impact should be seen from a full-year perspective and the company will make good the losses in this period.
“From a dispatch perspective, there might be an impact on 6-7 days of volume. It would impact our revenue. The time horizon is the entire year, so we would make up for it,” Ravneet Phokela, chief business officer of Ather Energy, told Mint.
The comments came after the company’s losses narrowed slightly to ₹178 crore from ₹183 crore in the year-ago period, but revenue saw a 79% jump to ₹644 crore. The improvement in revenue came on the back of a 97% jump in volumes to 46,078 scooters. Shares of the company soared 15% to settle at ₹399.25 apiece on the BSE on Monday.
Ebitda improves
Due to the increase in sales and improvement in cost structures, the company saw its earnings before interest, depreciation and tax margin improve to -16% from -33% earlier. This means the the company loses ₹16 on ₹100 of revenue. While the company is moving closer to the breakeven point, the management has still not disclosed the monthly sales run-rate the company needs to do to reach the breakeven point.
However, the hiccup in dispatches to dealers will come at a time when it is closing the gap with its startup rival Ola Electric, which is ready to roll out rare earth-free motors soon.
Ather’s sales made up about 15.77% of the total electric two-wheeler pie in July at 16,231 units, significantly higher than 9.49% in the same month last year. Ola recorded sales of 17,848 units during the month.
Ather is currently exploring multiple alternatives to tackle the crisis of rare earth magnets and minimise impact on sales. The seven-day hit will come during a quarter which is expected to boost sales of the industry in an otherwise tepid year due to the presence of multiple festivals like Ganesh Chaturthi, and Navratri.
“Right now, we are in the development process. There are a bunch of things like design, homologation and testing which need to be done. So right now we are looking at all alternatives. It is an industry-wide issue and everyone will be impacted equally. But our focus on R&D gives us immense confidence that we will be able to find a solution,” Phokela said.
…
Disclaimer
We strive to uphold the highest ethical standards in all of our reporting and coverage. We 5guruayurveda.com want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.
Website Upgradation is going on. For any glitch kindly connect at 5guruayurveda.com
