1. At a Glance
India’s fanciest watch peddler is ticking louder—Ethos Ltd now controls over 20% of the luxury timepiece retail scene in India. But are these watches running ahead of fundamentals? Let’s open the case.
2. Introduction with Hook
Imagine walking into a store where a single timepiece costs more than your EMI for a 2BHK in Thane. Welcome to Ethos Ltd—India’s largest luxury watch retailer.
- 13% market share in the premium+luxury watch segment.
- 120% profit CAGR in 5 years.
- PE? An eye-watering 78.6x—because “luxury” deserves a markup.
Tick-tock, let’s pop this open.
3. Business Model (WTF Do They Even Do?)
Ethos Ltd is in the business of making time look expensive. It retails luxury watches from over 60+ premium global brands—think Rolex, Omega, Hublot, and Tag Heuer.
Revenue Streams:
- Retail sales of luxury watches (main bread & butter).
- After-sales services: watch servicing, repair, refurbishments.
- Ethos Boutiques & Online sales: A phygital blend—stores plus a decent e-commerce platform.
- Private labels: Slowly testing waters with in-house stuff.
They sell time, and people seem to buy it—with cash, EMI, and Instagram clout.
4. Financials Overview
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | ROCE (%) |
|---|---|---|---|---|
| FY21 | 387 | 5 | 11% | 9% |
| FY22 | 577 | 23 | 12% | 15% |
| FY23 | 789 | 60 | 15% | 18% |
| FY24 | 999 | 83 | 16% | 15% |
| FY25 | 1,252 | 96 | 15% | 13% |
Observations:
- Sales are ticking upward nicely (29% 3-year CAGR).
- Profit margins are healthy, albeit plateauing.
- ROCE is slipping a bit—maybe some overstocking of Swiss?
5. Valuation
Let’s crank the numbers:
- EPS FY25 = ₹35.9
- Current Price = ₹2,829
- PE = ~78.6x (yes, Titan-ish dreams)
Fair Value Range
| Method | Valuation | Remarks |
|---|---|---|
| DCF (bullish) | ₹3,100–3,400 | Pricing in expansion & rich OPMs |
| PE Multiple (60x) | ₹2,150–2,350 | Reasonable premium for luxury retail |
| EV/EBITDA | ₹2,400–2,600 | Steady EBITDA growth, cash flows a bit tight |
FV Range: ₹2,150 – ₹3,400
Current Price: ₹2,829
You decide if you’re buying time… or running out of it.
6. What’s Cooking – News, Triggers, Drama
- Rights Issue (July 2025): ₹409 Cr raised at ₹1,800—smart dilution or desperate inventory cash?
- Stake Dilution in Subsidiary: Ethos Lifestyle now 95% owned.
- Expanding store count + e-commerce push: new cities, better margins online.
- High-end partnerships: Exclusive deals with top global watch brands.
- Digital Pivot: Clicks are catching up with bricks.
7. Balance Sheet
| FY | Equity | Reserves | Debt | Total Liabilities | Net Worth |
|---|---|---|---|---|---|
| 2021 | ₹18 Cr | ₹139 Cr | ₹140 Cr | ₹394 Cr | ₹157 Cr |
| 2022 | ₹19 Cr | ₹213 Cr | ₹161 Cr | ₹504 Cr | ₹232 Cr |
| 2023 | ₹23 Cr | ₹608 Cr | ₹121 Cr | ₹880 Cr | ₹631 Cr |
| 2024 | ₹24 Cr | ₹859 Cr | ₹145 Cr | ₹1,171 Cr | ₹883 Cr |
| 2025 | ₹24 Cr | ₹958 Cr | ₹289 Cr | ₹1,410 Cr | ₹982 Cr |
Notes:
- Leverage creeping up—watch out!
- Net worth rising smartly with profits.
- Fixed assets up = store expansion mode ON.
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| 2021 | ₹63 Cr | ₹-10 Cr | ₹-45 Cr | ₹8 Cr |
| 2022 | ₹17 Cr | ₹-24 Cr | ₹26 Cr | ₹19 Cr |
| 2023 | ₹-2 Cr | ₹-256 Cr | ₹249 Cr | ₹-10 Cr |
| 2024 | ₹31 Cr | ₹-123 Cr | ₹125 Cr | ₹33 Cr |
| 2025 | ₹-20 Cr | ₹47 Cr | ₹-58 Cr | ₹-32 Cr |
LOL Facts:
- Negative free cash flow again?
- Inventory eating cash.
- Financing still holding it all together.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 18% | 15% | 13% |
| ROE | 10.3% | 10.0% | 10.3% |
| Debtor Days | 3 | 6 | 5 |
| Inventory Days | 228 | 230 | 247 |
| Cash Conversion Cycle | 166 | 185 | 215 |
- Inventory bloat = Cash Flow choke.
- ROCE dropping = Efficiency slipping.
- ROE stable but unimpressive.
10. P&L Breakdown – Show Me the Money
| FY | Sales | OPM | PAT | EPS |
|---|---|---|---|---|
| 2021 | ₹387 Cr | 11% | ₹5 Cr | ₹2.39 |
| 2022 | ₹577 Cr | 12% | ₹23 Cr | ₹11.19 |
| 2023 | ₹789 Cr | 15% | ₹60 Cr | ₹23.65 |
| 2024 | ₹999 Cr | 16% | ₹83 Cr | ₹31.08 |
| 2025 | ₹1,252 Cr | 15% | ₹96 Cr | ₹35.93 |
TL;DR: Margins solid. EPS compounding. Profits ticking nicely. But OPM might be topping.
11. Peer Comparison
| Company | P/E | ROE | Sales (TTM) | OPM | CMP / BV |
|---|---|---|---|---|---|
| Titan | 90.5 | 31.75% | ₹60,456 Cr | 9.4% | 25.9x |
| Kalyan | 85.3 | 15.9% | ₹25,045 Cr | 6.0% | 12.7x |
| PNG | 38.0 | 20.9% | ₹7,693 Cr | 4.4% | 5.3x |
| Ethos | 78.6 | 10.3% | ₹1,251 Cr | 15.0% | 7.7x |
- Ethos = high-margin, low-volume luxury.
- Titan = volume + brand + chaos.
- Ethos plays niche, charges niche, grows niche.
12. Miscellaneous – Shareholding, Promoters
| Stakeholder | Jun 2023 | Jul 2025 | Trend |
|---|---|---|---|
| Promoters | 63.8% | 50.6% | ↓ Massive dilution |
| FIIs | 6.5% | 12.9% | ↑ Gora confidence |
| DIIs | 10.5% | 18.5% | ↑ Domestic smart money |
| Public | 19.2% | 18.0% | Flat |
Juicy Tidbit: Rights issue sucked 22.77 lakh shares into market—dilution alert.
13. EduInvesting Verdict™
Ethos Ltd is a classic “premium retail” story in a country where the middle class is addicted to flexing. While growth looks exciting, the margins have a soft ceiling, and working capital cycle is bloating faster than an influencer’s ego.
So, is Ethos really selling time… or is the time up for lofty valuations?
We’ll let the clock keep ticking while you ponder that.
Metadata
– Written by EduInvesting Team | July 19, 2025
– Tags: Luxury Retail, Ethos, Watch Market, Consumer Durables, Premium Valuation, IPO Watch, India Consumption Story
