- 16 Jun 2022
- ICICIdirect Research
HMCL’s associate company i.e. Ather Energy to Setup a new manufacturing plant
HEROMOTOCO - 5829 Change: 25.55 (0.44 %)News: As per media sources Hero Motocorp backed Ather Energy (offering electric 2-W’s) is looking to set up a third plant & expand its manufacturing capacity. The company is said to be in talks with officials of several state governments, including Andhra Pradesh, Maharashtra, Gujarat, Telangana and Karnataka, to set up an additional manufacturing plant with an annual capacity of about 15 lakh units.
Views: This comes as surprise to us with present manufacturing capacity at Ather pegged at ~1.2 lakh units in Hosur (Tamil Nadu) which is already planned to be expanded to ~4 lakh in FY23. This is amidst retail sales at the company at ~16,000 units for CY21 and presently monthly run-rate of ~3,335 units (annualised volume expected at <= 50,000 units in CY22). We believe such a step is envisaged keeping in the mind the long term EV penetration targets domestically (~30% by FY30E) and long gestation period in commencing production at a greenfield plant.
Impact: Neutral