About a month ago, Ather Energy’s cofounder Tarun Mehta remarked that sales volume alone wouldn’t drive profitability, but product innovation would. In hindsight, it seemed like a subtle signal to the market, hinting at a likely decline in electric vehicle sales during the first quarter of FY26.

As per Ather’s Q1 FY26 results, the startup saw a 3% sequential decline in the vehicles sold to 46,708 units as against 47,411 in the previous quarter. This impacted the startup’s top line, which took a margin hit in comparison to the previous quarter.

In Q1 FY26, Ather Energy’s revenue from operations stood at INR 6,446 Cr, 3% hit compared to the previous year. Moreover, Ather’s revenue per unit declined by almost 4% on a sequential basis.

All these metrics suggest a poor quarter. However, on the very day of the result, Ather’s shares surged as much as 16%.

The reason behind this uptick is that, despite the company’s revenue decline on a sequential basis, the Bengaluru-based EV two-wheeler startup significantly reduced its losses by 26% on a sequential basis.

Moreover, it improved its overall margin, indicating a clear pathway for a road towards profitability.

Ather Energy Moves Toward Profitability

Ather, which was listed on the public bourses two months ago, reported a drop in its net loss in its first quarterly report. The company’s net loss reduced by 26% QoQ to INR 178.2 Cr.

Ather, in its quarterly report, underlined that the drop in the loss is to be attributed to the company’s ability to bring down the cost of goods sold (COGS). The company’s COGS per unit, which........

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