Big Capex Announced by Kamath Brothers-Backed Multibagger Stock; Major Capacity Expansion to Meet Rising Demand

Ather Energy is seeking to convert strong electric two-wheeler demand into higher volumes as its Hosur facility operates at 98 per cent utilisation during peak production. The company’s board has approved capital expenditure of up to Rs 122 crore, including Taxes, to expand capacity at Hosur in Tamil Nadu and Factory 3.0 in Chhatrapati Sambhajinagar, Maharashtra.

The Hosur expansion will add annual capacity of 75,000 units, lifting the plant’s total capacity to 4.95 lakh electric two-wheelers from 4.2 lakh units. Ather expects the project to be completed in December 2026 and will fund the investment of up to Rs 58 crore through a combination of debt and internal accruals.

The larger addition is planned at Factory 3.0, which remains under Construction. Ather will add 1.5 lakh units of annual capacity to the facility, increasing its planned output to 6.5 lakh units from 5 lakh units. The company expects this addition to be completed in the second quarter of FY28 and has earmarked up to Rs 64 crore, funded through debt and internal accruals.

Of the Factory 3.0 investment, Rs 53 crore will be directed towards a new battery line, targeted for completion by the third quarter of FY28. The company said the line is intended to serve varying demand scenarios and reduce supply-chain dependence. Once both approved additions are completed, Hosur and Factory 3.0 will have combined planned annual capacity of 11.45 lakh units.

The expansion follows a period of sharp volume growth. Ather sold 2,62,942 vehicles in FY26, up 69 per cent YoY, while revenue from operations rose 63 per cent to Rs 3,671.76 crore. In the June 2026 quarter, net sales increased 88.79 per cent YoY to Rs 1,216.92 crore and the net loss narrowed to Rs 51.09 crore. The new capacity can support revenue growth, although timely commissioning and production ramp-up at the Maharashtra plant will be critical.

Ather Energy Multibagger Returns

At 2:46 pm on October 26, 2026, Ather Energy shares were trading at Rs 1,522.20. The stock was 10 per cent above its previous close of Rs 1,383.85 and remained about 11.6 per cent below its 52-week high of Rs 1,721.60. The stock has rallied about 112 per cent on YTD basis, as a result, it has delivered multibagger returns. 

Zerodha’s Kamath Brothers Hold Stake in Ather Energy

Zerodha co-founders Nithin and Nikhil Kamath have an investment interest in Ather Energy through entities associated with the Kamath family. According to the company's shareholding pattern for the quarter ended September 2026, Kamath Associates held 43,03,719 shares, representing a 1.09 per cent stake. Another investment entity, NKSquared, held 42,30,943 shares, accounting for a 1.07 per cent stake. Together, these entities held approximately 85.35 lakh shares, representing 2.16 per cent of Ather Energy's equity.

What This Means for Investors

The capacity decision reinforces Ather’s shift from a demand-constrained business to one focused on manufacturing execution. The Hosur addition is relatively near-term and directly addresses a plant already operating close to full utilisation. Factory 3.0 is more strategically important because it increases planned capacity by 30 per cent to 6.5 lakh units annually and adds a battery line that could improve supply-chain resilience. The expansion also supports the company’s planned broader product and geographic reach.

The development is potentially supportive for growth, but its earnings benefit will depend on how quickly Factory 3.0 reaches reliable production volumes and whether demand remains strong as supply improves. Funding through debt and internal accruals also requires attention because Ather remained loss-making in FY26, despite a sharply narrower loss and improving operating cash flow. At about 14.44 times FY26 sales and 20.61 times FY26 book value, the valuation continues to place considerable weight on scale, better fixed-cost absorption and durable margin improvement.

Disclaimer: The article is for informational purposes only and not investment advice.