Thank you very much, sir. We will now begin the question -and-answer session. The first question is from the line of Nishit Jalan from Axis Capital.

Congrats on a good set of numbers. Tarun, I have two questions. One, on the cost reduction side, we have seen gross profit per vehicle improving by about INR3,000-odd Q3, INR3,500. And this is despite that incentive came down by around INR5,000 in this quarter. So, I just wanted to understand how much of it is d riven by cell prices and how much of it is driven by vis a vis basically company-specific and industry-specific factors, number one. Number two, how do you see this going ahead? Are entire benefits from cell price reduction and all have come through, right, or more we will see coming ahead? So, some indications, some thoughts around how should we look at BOM costs going ahead. Second question, you did talk about 7 days of impact because of rare earth issues in this quarter. You mean 7 days of production impact and retail impact will be much lower because of inventory, because we are getting into the festive months also now, so probably your production run rate needs to pick up? So, will we be able to do that or not? And thirdly, you are unveiling this EL platform on 30th of August, right? When do we see products under EL platform are getting launched and which will be the key states or anything that you will be targeting this platform primarily, right, or will it be more pan-India across states or something? Thank you.

Thanks for the visions, Nishit. So, I'll take a quick stab at them. So yes, we saw a gross margin improvement, and I think what you will see as you dive into the numbers is that our average selling prices have actually held up quite favorably despite subsidies coming down by INR5,000. So, it's actually a combination of our value engineering work, favourable commodities, also the strength of the brand. We've been able to calibrate prices upwards and ensure good attach rates of software. Our product SKU has been very heartening, even with Rizta, not just 450. So, product SKU has been very favourable. Software attach rates have been very favourable. All of them have contributed to very steady ASP despite subsidies coming down and very steady revenue realization despite subsidies coming down. It's a mix of, on the cost reduction front, I would say it's a mix of cost reduction and commodities, particularly cells in our case, that has played out this quarter. On rare earth, very quickly, it's a blended thing. Obviously , we are factoring higher production and higher throughput for this quarter over the previous quarter, particularly with the new stores and the festival that's ahead of us. So, when I say 7 days of impact, that's factoring all of that in. So, the right way to see this would be not like production stopped for 7 days, but a possible gap in our ability to supply our dealers demand for up to about a week for this entire quarter. Obviously, teams continue working hard on minimizing this also. This was a larger gap a few months ago, but a lot of strong R&D work has helped minimize this. At this point, this will have some impact on retail. I would be amiss if I said this will have no impact on retail because our channel stocks are not that high. But there is channel stock and that's the advantage of having a channel. So, the impact on retail would be lesser than that of wholesale. So net, I think it will be a small impact in Q2, hopefully. Obviously, if anything changes, we'll keep our eyes on it . But otherwise, it seems fine. And EL platform, when? So, we'll be unveiling the platform this month and later this month. Pardon me, I will not be able to share timelines on the product today. But I think next year we should see some good action. But I will not be able to give you more specific timeline than that. EL, traditionally, I've been always clear will help us expand the market because it's a cheaper platform for us to manufacture. It'll also be manufactured largely out of our new facility, which is more integrated, so has better assembly costs. So overall, EL opens up the gate for more accessible priced products in the coming year.

Thanks, Tarun. Just one clarification here. What I meant on EL was that, obviously, it will be a cost-effective product. So, will you look to launch more in middle India, North India and all or will you do it P an India, even in the Southern markets and all in terms of the strateg y because you may not want to cannibalize your high-priced products in Southern states. So, do you think that both these will coexist and you will launch it parallelly across all your states or all your dealers?

As of now, we don't have a deep view on this. We're excited about EL as not just a product that can expand time, but also a product that can potentially expand the margins. So , given the potential for expansion on both, I see no strong reason today to gu ide EL on only one specific geo, but obviously, as the product shapes up more and we get closer to the launch, you will see our actions call this out.

One small thing related to numbers. Typically, OEMs come up with their monthly numbers on first of the month. So, will you be also doing that? And secondly, in your presentation, I can see that Q1 FY’26 volume since 46078. But when we look at the SIAM numbers, those are on the higher side. So, just wanted to understand, maybe we can take it offline also, but there's a gap between the numbers which we see in SIAM and which we see in your presentation?

Can you repeat the -- so your first question was, would we announce numbers on the first of the month?

Yes, typically, if you see, for example, all the companies, auto companies, for example, on 1st of August they reported numbers for the July month, all the listed companies. So, just wanted to understand if you guys will also be doing that now that you're a listed com pany. And secondly, the numbers is also very consistent?

Yes, very quickly on that. Right now, we have no plans of announcing monthly numbers beyond what you see in Vahan. Honestly, I think our industry has an overload of numbers. There are already Vahan numbers. There are other retail announcements. If on top of it, we also start announcing monthly wholesale numbers, I think it will be confusing. So right now, I don't see a very strong reason to announce monthly dispatches, b ut happy to revisit it at a later point if there's a compelling reason. Your second question was what is the difference between what and what?

So, basically we get thes e Ather sales numbers from SIAM data also a nd there is this vehicle sold number in the presentation. The numbers don't add up. It's about 1,0 00, 2,000 units difference every quarter?

The financial numbers that you see are wholesale numbers. So, that is what has been dispatched to dealers and received by them. I think there could be a difference because of transit in case of SIAM. Again, please pardon in case I'm wrong. I'm just reading t his off the top of my head. SIAM numbers might be dispatched data. So , there could be a transit gap depending on the quarter. We don't count vehicles which are under transit and not received by the dealers as our wholesale in our P&L.

Okay, got it. Thank you so much and all the best.

The next question is from the line of Kapil Singh from Nomura. Please go ahead.

My first question is on the rare earth issue. Could you help us understand how you have handled this situation? What kind of solutions have been worked out? Are these short-term or long-term? And is there any cost involved that we should keep in mind?

For the rare earth, the key challenge boils down to the fact that China has banned the export of heavy rare earth magnets, which leaves a few possible options for anybody. Either you partly assemble your motors in China and don't import magnets, or you move production to heavy rare earth free magnets, which are rare earth magnets, or you move away from rare earth of any category and move to ferrite. Now, in our case, we are exploring all. I will not be able to share at this point. I'll likely be able to give more color by the end of Q2 once we finish the transition. But at this point, honestly, we are exploring all options. I'm more optimistic about moving to rare earth magnets out from hea vy rare earth magnets because rare earth magnets don't have an export ban and have a little bit of more supply available globally, with China not being the only one. So, I'm more optimistic about going heavy rare earth free to rare earth magnets. Cost impact. At this point, there is a small impact of additional logistics because we've obviously had to scramble our supply chains. But we expect it to be a small number at this point and also temporary.

Okay. And will there be any performance impact also with this?

The reason we are taking time in engineering is spending a lot of time in R&D is because we are working hard to ensure that there is no impact on the product performance at all.

Great. Second question is on demand. Just your general understanding of how I know your numbers are obviously ramping up very nicely. But what is the general feeling at this point about electric vehicle demand? The consumers who are not converting to elect ric right now, what is the key hurdle in your view? And then lastly, I have a question on we've seen some improvement in non-vehicle revenue also. So, some of the products, I think accessories have started rolling in the market. So , any color you can give in terms of how the customer experiences?

So overall, I believe the key focus for us as an industry has to now move towards converting the more mainstream customers. I believe that now that EV penetration is starting to get in the 20% range in scooters, we've gone beyond early adopters and even ma ybe early majority , sorry innovations and early adopters. I think we are now getting into the early majority crowd, which is the 20% to 50%, 20% to 60% kind of market opportunity. And for these customers, I believe the key focus has to now move on to really giving them assurance, really giving them comfort that electric is a very good, safe choice. I believe that for most scooter buyers, electric already looks like an upgrade. Electric already looks fancy. Electric already looks premium. I think what they need is comfort that the battery is going to be good, the safety is going to be good, that service is going to be good, that resale price is going to be good. And I believe that we will all have to focus our communication more towards those topics, something that we are already doing as part of our Ather Advantage campaign in marketing, which is live right now. You will notice we've pivoted our communication very heavily towards these topics. Kapil, your second question was?

On the non-vehicle revenue.

Non-vehicle revenue. Yes, so non -vehicle revenue, honestly, definitely will hopefully trend higher and higher because service revenues will keep increasing with a higher base of installed vehicles in the field. That's a very strong upside. Also, we've been very focused on two thi ngs. First is accessories. So, accessories, Halo is trying to now contribute meaningfully. Accessory - sale of accessories per vehicle was stronger, quite materially stronger in Q1 over previous quarter. Software has been trending again very favorably as I've called out and the numbers are there. 89% attach rate in Q1 also. Finally, even charging infrastructure had a fairly strong quarter with very strong monetization this time around. I don't want to oversell charging infrastructure, but in terms of contribution to the expansion, it did have a very strong contribution this quarter.

The next question is from the line of Vishal Goel from HSBC.

Thanks for taking my question and congrats on your good sales of results. So, my question is more on expansion. In more mature states and cities as well, the EV penetration has sort of stagnated now, for example, in Bangalore or Kerala. So, what is your view on the same and what has been your experience with the new showrooms? Does the company have to invest significantly in that local brand building activity there? I just want to take your view on this part.

So, first on stores, ours is almost completely a dealership model, which means our partners spend the capex to get the stores and the service centers up and the opex is on them. So, at a company level, there is no additional cost increase or capex because of distribution or service infrastructure expansion. I see a significant opportunity for our brand in Middle India and North India. Even in South India, there are pockets which we continue to see opportunities in, particularly in Tamil Nadu, where there were several cities, I think like 12, almost 15 -20 cities, where Ather did not have a store until a few months ago. So, there is a distribution expansion opportunity for us here also. I think at an industry level, as I called out, I think the focus has to now move towards giving people more comfort, giving people more assurance and I do believe that we will continue to see strong traction, strong results. ASPs are holding up really well , customer interest is coming in really well and a lot of this growth, at least at the industry level, will not be very linear. You will see spurts. Every time you crack a new cohort of customers, you will certainly see growth spiraling very rapidly and then maybe a couple of more muted quarters. But at this point, the factors are really loaded in favor of electric. The unit economics is strong and brands have very credible products. I am very optimistic.

So, basically you are saying that for a local brand building, your dealership is coming in and the company is not taking much of the cost there.

So, our brand building spend happens at a more central level, where whether it is state -wise campaigns or national campaigns, Ather does invest meaningfully in marketing and I am a believer that a young brand like us is ought to spend in marketing and brand building. But we do not have to spend for getting the infrastructure. So, the store is not on us and the service infrastructure is not on us. But the marketing spends are largely by Ather.

I just want to make one more point. One more factor that I am optimistic about for driving industry growth is that two of the largest scooter manufacturers from Iceberg now have their EV portfolio live, which are our two Japanese counterparts. And I believe that their entry on the electric side is going to drive a significant awareness about electric for the mainstream customer. Because, put another way, 70% of people who buy a scooter today and those two brands would not even see an electric if they went to their showrooms in the past. Now they will, which will drive further awareness and further consideration for pure-play EV brands like ourselves and for the industry. So, I think one of the strongest things that has happened in the last few months is these brands also getting into electric.

Right, thanks. And that's very clear. So, my follow -up question was that what could be the blended impact of this mandatory ABS thing on your portfolio?

It's a little early for us to be sure. But one factor that really helps us is that I think the entirety of our portfolio has a disc brake in the front. The entirety of our portfolio has a disc brake in the front. So, a very large chunk of our portfolio has a disc brake in both the front and the rear. So, we don't have to take that cost on. We have to take a lower element of the disc cost on compared to many other players out there. In general, I am and we at Ather are pretty bullish about safety being a big theme for the Indian two-wheeler buyers. I believe just like what we saw in cars, safety features and focus on safety will become an important selection criterion or an important filtration criterion for the customer of the future. So, directionally, we don't have a dissonance with this path. Obviously, we would prefer for this to be not mandated and to be more optional at a brand level. But if it is mandated, I think, we might be in a slightly better place than some other brands. Also, given that our ASPs are slightly higher, the contribution of ASP , contribution of ABS to our COGS would be a little lower than many other brands out there.

The next question is from the line of Rahul Kumar from Vaikarya.

Yes. Hi. First question I have is, what's your strategy on the vendor diversification for products like traction motors, notwithstanding this rare earth crisis, but in general for the future?

I think this is a little bit of a high-level response. I believe we are now in an era where the number one priority for the supply chain has got to be derisking and hedging. And it's not just us or not just our industry, but across industries. We are going to be no different. We are going to be focusing on that in a big way. We want to now ensure that our supply chains have alternates at a country level, alternates definitely at a supplier level. And I'm saying Tier 1, Tier 2 of suppliers also. So, we focus on that in a big way even in the past. In our prospectus, we had called out how expanding the number of suppliers has been a very big strategic imperative at Ather in the past, with the vast majority of our bill of material being dual or even triple sourced. And that, if anything, becomes an even higher selection criteria for us and a focus for our engineering and supply chain teams. I think with the entire crisis that we had on magnets in the last few months, this is opening up new and new innovative ideas about how to derisk on that front, how to derisk on the lithium - ion cell front. And the rest of the raw material anyways had a ver y strong India supply chain, which itself was also fairly diversified. So, this will be, to summarize, a fairly large, in fact, the highest priority for our supply chains in the coming time.

Okay. And just for the new plant which you have in Aurangabad, what's the ramp up plan over there?

So, IPO proceeds have only come to us last quarter and we are just wrapping up some compliance work at the site. Work will be commencing very shortly. In fact, probably this quarter itself, we will have a few announcements hopefully to make. We will keep you updated as those, as we move on those steps. Right now, we are targeting sometime next year for go-live of this plant.

Okay. And last question, are you planning for a motorcycle launch, EV motorcycle launch?

We continue to work on a platform. We've called it the Zenith platform, with our focus being on mid-performance bikes, around the 150cc, 180cc mark roughly. Having said that, we are right now only working deeply on the platform. This will take a little bit of time. And our current short-term priority is on the EL platform and the scooter products that it will yield in the near - term. So expect the motorcycle announcement to be definitely not this year. It's still some time away. For us, motorcycles are still a priority two after scooters.

The next question is from the line of Kapil Singh from Nomura.

So, Tarun, one question was on the incentives which you will be getting for the plant. Can you give some indication of that as well?

I'll just request Sohil to answer this so that he gets the facts right.

So, Kapil, we have a significant capital subsidy chunk which will be received against the total capex investment. And from an opex point of view, we have a 2.5% GST uptake that we will receive from the state share, which is all the vehicles which are being sold out of the state. And the capital subsidy is over a period of seven years and the GST subsidy is over a period of 15 years. And this is over and above the standard SOPs that are already part of the going live where there is an exemption on discounting and exemption on electric duty, stamp duty, land price, all of that.

Okay. And am I correct in understanding that the current plant does not have these kind of incentives or we currently have these kind of incentives also?

So, there are similar, not exactly apple -to-apple, but there are incentives that we have in the current plant as well, and we continue to accrue as and when the milestone is reached. So , that is also duly accounted in the books, even in fact last year as well. But the scale is different because the size of investment is different.

Okay. And one question was on the employee cost. I think you did allude a little bit to it, but, like, if you could give some indication whether it's at a reasonably normalized level or you expect this to step up further through the year?

So, Kapil, I expect the operational teams, the wage bill to continue increasing for some time on the operational team front, which is our manufacturing and our sales and service , HO teams. I believe that there, I expect their cost to continue increasing for the next actually few years. On the R&D front and the corporate teams, I think, we are very close to achieving a steady state headcount. There will be some more expansion, but I don't expect them to be very noticeable. That plus obviously annual pay revisions. But the big expansion will continue happening for a while on the operating teams.

Okay. And similarly, the other expenses, these are at normalized levels because last quarter was quite high and this quarter is quite low. So just checking if this is the normalized run rate and then it will go online.

So, the right way to see EBITDA would be, we believe that EBITDA loss is better by about INR20 crores to INR30 crores because the presence of the IPO right in the middle of the quarter, some of the expenses did not start on time. So maybe to that extent, you could normalize. But, yes.

Okay. And just finally, the capex number for the full year, how much do you expect to spend? And do you have any indication what could be the cash burn for the year?

So, it will be difficult for me to share forecasts on that at this point. The big capex outlay for us compared to last year would obviously be Factor 3.0 in Aurangabad, Chhatrapati Sambhajinagar. Outside of that, I expect our capex would be quite similar to o ur capex last year, given that last year we had some pending payments coming from Rizta and capacity expansion continually happening for Rizta. While this year, there is some capacity expansion and a fair bit of R&D. So, I think that part of capex might be quite comparable, plus whatever will come due for Factory 3.0.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Murali Sashidharan for the closing comments.

Thank you for taking the time to join us today and for the questions and perspectives you have shared. We value continued dialogue and look forward to keeping you updated on our progress in the quarters ahead. Until then, thank you once again and have a good week ahead.

On behalf of Ather Energy Limited, we conclude this conference. Thank you for joining us and now you may disconnect your lines.