1. At a Glance
KDDL started in 1981 making watch dials and hands — the tiny things you squint at before deciding you’re late. Four decades later, it owns Eigen, a precision engineering brand, and a 50.12% stake in Ethos Ltd, India’s luxury watch retail kingpin. FY25 revenue clocked in at ₹1,648 crore with OPM of 16%, down from the FY24 peak of 18%. The stock’s down ~27% YoY after peaking at ₹3,815 — proof that even in the luxury game, the market still wears a cheap Casio when it’s nervous.
2. Introduction
If Titan is the Salman Khan of Indian watch retail — big, brash, and shirtless in ads — KDDL is the supporting character who quietly steals the scene. It’s not just a component maker; it’s the landlord of the luxury watch space through its Ethos stake.
Over the last 5 years, sales CAGR sits at 20%, profit CAGR at a ridiculous 175% (from low bases), and the company has been generous with dividends (payout ~29%). But FY25 profit dipped 8% and the market responded with a sell-off that wiped away a chunk of its market cap.
Upcoming Q1 FY26 results (14 Aug 2025) could be the reality check or revival act. With luxury consumption in India still rising, KDDL’s future is a mix of high-precision manufacturing and high-margin retail influence.
3. Business Model (WTF Do They Even Do?)
KDDL’s business has two main parts:
- Horological Products: Watch dials, hands, precision engineering under Eigen. Supplies to global watch brands, OEMs, and
- Indian players like Titan.
- Luxury Retail Exposure: Through Ethos Ltd — India’s largest luxury watch retailer, housing brands like Rolex, Omega, and Tag Heuer.
The horological segment is the breadwinner; Ethos is the flashy cousin bringing in aspirational glamour. Precision engineering also opens doors to non-watch industries — automotive, aerospace, and industrial components.
4. Financials Overview
Fresh P/E Calculation:
- Q4 FY25 EPS = ₹16.20 → Annualised = ₹64.80
- CMP ₹2,610 → Fresh P/E = 40.3 (higher than the reported 34.6 due to quarterly fluctuations)
FY25 Performance:
- Revenue: ₹1,648 Cr (+18% YoY)
- EBITDA: ₹260 Cr (+2% YoY)
- PAT: ₹142 Cr (+3.6% YoY)
- OPM: 16% (down from 18% in FY24)
Roast: Sales growth solid, margins down, profits flat — like a bakery selling more cakes but with less frosting per slice.
5. Valuation
Method 1 – P/E Based:
Historic P/E band: 20–45.
Based on FY25 EPS ₹75.47:
- Lower band (20x): ₹1,509
- Upper band (45x): ₹3,396
Method 2 – EV/EBITDA:
FY25 EBITDA = ₹260 Cr; Debt = ₹453 Cr; Cash = negligible; EV ≈
