Ethos Ltd. Share Price

The company witnessed a 17.61% growth in the revenue at Rs. 2296.76 millions for the quarter ended December 2022 as compared to Rs. 1952.79 millions during the year-ago period.Net profit for the quarter ended December 2022 increased significantly by 71.29% to Rs. 205.75 millions from Rs. 120.12 millions.Operating profit surged to 392.16 millions from the corresponding previous quarter of 290.90 millions.

The issue will open for subscription on May 18, 2022 and will close on May 20, 2022

Ethos

• Ethos is coming out with a 100% book building; initial public offering (IPO) of 55,93,682 shares of Rs 10 each in a price band Rs 836-878 per equity share.
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
  
• The issue will open for subscription on May 18, 2022 and will close on May 20, 2022.
  
• The shares will be listed on BSE as well as NSE.
  
• The face value of the share is Rs 10 and is priced 83.60 times of its face value on the lower side and 87.80 times on the higher side.
  
• Book running lead managers to the issue are Emkay Global Financial Services and InCred Capital Wealth Portfolio Managers.
  
• Compliance Officer for the issue is Anil Kumar.
  

Profile of the company

The company is India’s one of the largest luxury and premium watch retail player having 13% share of the total retail sales in premium and luxury segment and a share of 20% when seen in exclusively luxury segment in the financial year 2020, delivering a content-led luxury retail experience to its customers through its online and physical presence. In addition to its chain of 50 physical retail stores in 17 cities in India in a multi store format, it offer an Omnichannel experience to its customers through its website and social media platforms. It has the sizeable portfolio of premium and luxury watches in India enabling it to retail 50 premium and luxury watch brands like Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F. Bucherer, Tissot, Raymond Weil, Louis Moinet and Balmain. It enjoy a healthy market share of 20% in the luxury watch retail segment and 13% in the premium and luxury watch retail segment in India, In addition to its premium and luxury watch retail, it also undertake retail of certified pre-owned luxury watches since Fiscal 2019.

The company’s Omnichannel approach is premised on its endeavour to provide experience, content, customisation, reach and convenience to its customers. In addition to its premium and luxury watch retail, it also undertake retail of certified pre-owned luxury watches under ‘Certified Pre-Owned’ (CPO) luxury watch lounge located at National Capital Territory of New Delhi. It started its pre-owned luxury watch retail business in Fiscal 2019. Its physical presence is leveraged by its strong digital platform with a frequently visited website, effective social media communication, a large database of HNI customers and an active program of home and office delivery of luxury products.

Proceed is being used for:

• Repayment or pre-payment, in full or in part, of all or certain borrowings availed by company.
  
• Funding working capital requirements of company.
  
• Financing the capital expenditure for establishing new stores and renovation of certain existing stores and upgradation of enterprise resource planning software.
  
• General corporate purpose.
  

Industry overview

Luxury Goods market in India is currently valued at Rs 45,210 crore as of FY 2021. Premium and Luxury Fashion & Lifestyle segment has the highest share with 33% contribution in FY 2020 mainly because of their higher volumes. The Covid-19 pandemic had a major impact on the luxury goods market with the market contracting by 23% from FY 2020 to FY 2021. Other Luxury product market which includes Experiential Luxury, Luxury wines and spirits, Luxury Leather Goods, Luxury Consumer Electronics and Luxury were the most impacted segment with market contradicting by 36%. Premium and Luxury car market was the least impacted segment, contradicting by 10%. The overall Luxury market in India is expected to show a path to recovery. It is expected that the Luxury market would be valued at Rs 69,430 crore by FY 2025 and grow by 11% CAGR over the next 4 years.

Watch Market in India was valued at Rs 13,500 crore in FY 2020 and is expected to grow at a CAGR of 10.6% to reach Rs 22,300 crore by FY 2025, on back of factors like increased discretionary spend on watches category, opening of more organized channels of purchase like MBOs and online marketplaces & vertical specialists, increased penetration of smart watches in mid to premium category, omnichannel market organization etc. The Indian watch market is further segmented basis Product type and Price. On the basis of Product type, they are differentiated as ‘Traditional watches’ (includes both Analogue and Digital Watches) and smart watches. While traditional watches occupy almost 76% share of the overall watch market, smartwatches hold 24% share, with the latter expected to grow a faster rate, owing to consumer demand, fitness & health consciousness, technological advancements linking the watch to other smart devices, and most importantly, the entry of multiple brands in the mass to mid segment smartwatch space which has given consumers the option to try out smartwatches without pushing into the premium segment. Key brands in entry level smart watches are Noise, Boat, Amazfit etc.

Pros and strengths

Access to large luxury customer base: The company has built its customer base over the years and continue to aim to attract new customers to its platform by providing an engaging shopping experience. As of March 31, 2022 it has access to a HNI customer base of over 2,83,300. Access to its digital platform increased over the calendar years i.e. 15.47 million number of sessions in 2019 to 21.46 million number of sessions in December 31, 2021. Its results of operations are significantly affected by consumer demand for its products. Each of its product lines are discretionary products, which are highly dependent on trends in consumer spending and, consequently, are sensitive to factors that influence consumer spending. Demand for its products is directly proportional to the number of its HNI customers. The company’s understanding of the luxury customers has enabled it to evolve its luxury customer base, enabling it to drive the sales of its luxury and high luxury watches. Its loyalty programme, Club Echo, has also been subscribed by over 2,83,300 registered members which gives a unique insight into understanding the buying pattern of its customers and reward them for their loyalty.

Leading luxury watch Omnichannel retail player of India: The company was quick to establish a robust digital infrastructure which has been its key strength and enabled it to scale business and increase its customer base. Its digital team consists of over 70 employees across different teams, including performance marketing, creative, content, social media, product/website, technology and internet sales among others. Its website showcases over 50 brands, offering a great eco-system for visitors to not only purchase these watches online but also to discover watches, and understand their legacies. It use data collected across its channels to re-market to the customers who have shown interest in its website across the popular networks and social media platforms to remain top-of-mind for its customers.

Strategically located and well invested store network: With 50 retail stores, over 7,000 varied premium and luxury watches and about 30,000 watches in stock at any given time, the company’s retail stores are located strategically in shopping malls, airport terminals and other premium areas. The prime locations that the company chooses for its stores in the growing Indian luxury watch markets, the investments that it has made in these stores, the selection of products that it is able to offer to its customers in-store, the presentation of products within the stores, the quality of staff and the service that it offer to customers will continue to help the company to increase sales of luxury watches. Its flagship stores are high-street stores allowing lower mall dependency for it, which proved to be a massive structural advantage, especially during the pandemic year, when all the shopping malls were directed to be closed down.

Strong and long-standing relationships with luxury watch brands: The company value its brand relationships and have a team of brand managers who work closely with brands to strategize and execute growth and brand building strategies. It view itself as brand custodians and apply a client-servicing mindset to its interactions with brands to ensure it is building long-term strategic relationships. The retailing of luxury watches requires formal approval from the owner of the luxury watch brand to carry a particular product on a store-by-store basis, rather than being allowed to distribute products across an entire business. The manufacturing of key luxury watch brands is highly concentrated among a limited number of brand owners that are primarily based in Switzerland. Brand owners control distribution through strict, selective distribution arrangements, which are limited by geography, are typically granted on a store-by-store basis and contain a wide range of requirements on how their products are to be displayed, how they can be sold.

Risks and concerns

Depend on third-parties for transportation needs: The company does not have any dedicated in-house transportation facility, though sometimes its employees transport the products. However, it mainly rely on third party transportation and other logistic facilities for transportation of products from its warehouses to various stores. For this purpose, Criticalog India and AF Ferrari Secure Logitech are the entities that are relied upon by the Company for its transportation needs. Further, there is no conflict of interest between Issuer Company/subsidiaries/Promoter/Promoter Group/Directors/Key Managerial Person or any other associate entity, directly or indirectly, and such courier services are not related parties of Company.

Business is subject to seasonality: The company is impacted by seasonal variations in sales volumes, which may cause its revenues to vary significantly between different quarters in a Fiscal. Typically, it see an increase in its business before Diwali and during festive season sales. Therefore, its results of operations and cash flows across quarters in a Fiscal may not be comparable and any such comparisons may not be meaningful or may not be indicative of its annual financial results or its results in any future quarters or periods.

Operate in competitive market: The company faces competition from other luxury watch retailers both organised and unorganised, and potential entrants to the luxury watch retail industry that may adversely affect its competitive position and profitability. It expects competition could increase with new entrants coming into luxury watch retail industry, who may have more flexibility in responding to changing business and economic conditions, and existing players consolidating their positions. Some of its competitors may have access to significantly greater resources, including the ability to spend more on advertising and marketing and hence the ability to compete more effectively. Some of its competitors may have greater financial resources or a more experienced management team than it. Like it, they may also benefit from greater economies of scale and operating efficiencies. Competitors may, whether through consolidation or growth, present more credible integrated or lower cost solutions than it does, which may have a negative effect on its sales.

Business is susceptible to shortage of products: The company’s business and the industry it operate in are vulnerable to shortage of products. While it has implemented measures to avoid such stock shortage at stores, these measures may not be entirely effective against shortages at its stores and warehouses. Shortage may occur through a combination of pilferage by employee, damage and obsolescence. The retail industry also typically encounters some inventory loss on account of employee theft, shoplifting, supplier fraud, credit card fraud and general administrative error. Its business operations also involve a majority of cash transactions. Although it has not experienced any significant incidents in the past, it remain susceptible to such losses. An increase in product shortage at its existing and future stores or its warehouses may force it to install additional security and surveillance equipment, which will increase its operational costs and may have an adverse impact on its profitability.

Outlook

Ethos is the largest luxury and premium watch retailer in India. The company delivers premium luxury watches through websites, social media platforms and physical stores. Ethos operates on an omnichannel model and allows customers to order products either offline or online and have the flexibility of buying products at one store and returning at another or browsing product catalogues and placing orders online with doorstep delivery. The company's watch portfolio has 50 premium brands including Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F. Bucherer, Tissot, Raymond Weil, Louis Moinet and Balmain. The company’s physical stores provide it the ability to interact with its consumers in person. Owners of major luxury watch brands invest heavily in marketing. As a luxury watch retailer, it benefit from the increased awareness generated by traditional marketing activities as well as promotional activities, such as watch fairs, exhibitions and flagship store openings. On the concern side, the company’s business is import driven business. Any increase in import duties i.e., customs duties or any other charges in respect of the imported products or GST may impact pricing of the products and competitiveness of its products. Besides, the company could face liabilities or otherwise suffer losses should any unforeseen incident such as fire, flood, and accidents affect its stores and warehouses or in the regions/areas where its stores and warehouses are located.

The issue has been offered in a price band of Rs 836-878 per equity share. The aggregate size of the offer is around Rs 467.63 crore to Rs 491.12 crore based on lower and upper price band respectively. On the performance front, the company’s total income decreased by 12.55% to Rs 40,314.23 lakhs in Fiscal 2021 from Rs 46,100.56 lakhs in Fiscal 2020. The decrease was primarily attributable to loss of revenue due to lockdown restrictions imposed by the Government Agencies on account of Covid-19 in the first two quarters of Fiscal 2021. It has reported net profit of Rs 578.53 lakhs in Fiscal 2021 from net loss of Rs 133.40 lakhs in Fiscal 2020. As part of the company’s continuous efforts to offer the widest assortment of brands to its customer base, it will continue to invest in entering into new brand relationships. It will also continue to nurture its existing brand relationships. It endeavour to improve sales and hence create value for its brand relationships through improved merchandising, refined marketing and new data driven brand specific experiences. It wants to ensure that its platform maintains its position as a go-to premium and luxury watch retail destination for its diverse brand relationships. Many of the world’s leading watch brands are not yet present in India and it intend to partner with them and bring these brands to India. 

Pursuant to Regulation 30 of the SEBI (LODR) Regulations, 2015, Ethos has informed that it enclosed the press release titled as ‘Ethos Limited signs an Exclusive Partnership With Swiss Watch Brand Speake-Marin For The Indian Market’ being issued by the Company for the information of its valued investors.

The above information is a part of company’s filings submitted to BSE.

With this partnership, Ethos Watch Boutiques will exclusively retail Trilobe across India and the selection will be available from early 2023

Ethos is currently trading at Rs. 932.00, up by 14.15 points or 1.54% from its previous closing of Rs. 917.85 on the BSE.

The scrip opened at Rs. 916.30 and has touched a high and low of Rs. 934.15 and Rs. 910.85 respectively. So far 3285 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 1145.35 on 16-Aug-2022 and a 52 week low of Rs. 711.60 on 06-Jun-2022.

Last one week high and low of the scrip stood at Rs. 932.80 and Rs. 876.50 respectively. The current market cap of the company is Rs. 2167.04 crore.

The promoters holding in the company stood at 65.16%, while Institutions and Non-Institutions held 15.05% and 19.79% respectively.

Ethos has signed an exclusive partnership deal with contemporary watch brand Trilobe, to bring the finest of haute horlogerie to the Indian market. With this partnership, Ethos Watch Boutiques will exclusively retail Trilobe across India and the selection will be available from early 2023. The core range will include models from all Trilobe watch collections - Les Matinaux, Nuit Fantastique, Secret, and Une Folle Journee.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

Pursuant to Regulation 30 of the SEBI (LODR) Regulations, 2015, Ethos has informed that it enclosed the press release on 8th December 2022 titled as ‘Ethos Limited Set to Launch German Brand Tutima in India Under an Exclusive Retail Partnership’.

The above information is a part of company’s filings submitted to BSE.

Ethos has informed that the exchange has received the disclosure under Regulation 29(1) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 2011 for ICICI Prudential Mutual Fund.

The above information is a part of company’s filings submitted to BSE.

Pursuant to the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, Ethos has informed that the officials of the Company will be meeting Investors on 20th December, 2022 hosted by Monarch Networth Capital in Delhi. Additionally, management will be meeting Investors on 21st December, 2022 in Mumbai. The copy of Investor Presentation ‘November 2022’ has been uploaded on the website of the company www.ethoswatches.com and is also available on the stock exchanges. This information is submitted pursuant to Regulation 30(6) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015. The may happen due to exigencies on the part of Participants / Company.

The above information is a part of company’s filings submitted to BSE.

The multi-brand boutique is located at ML Acropolis Mall in Siliguri, West Bengal

Ethos is currently trading at Rs. 1016.35, up by 5.95 points or 0.59% from its previous closing of Rs. 1010.40 on the BSE.

The scrip opened at Rs. 1023.95 and has touched a high and low of Rs. 1027.75 and Rs. 1014.35 respectively. So far 143 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 1145.35 on 16-Aug-2022 and a 52 week low of Rs. 711.60 on 06-Jun-2022.

Last one week high and low of the scrip stood at Rs. 1037.70 and Rs. 982.85 respectively. The current market cap of the company is Rs. 2374.03 crore.

The promoters holding in the company stood at 64.68%, while Institutions and Non-Institutions held 16.80% and 18.52% respectively.

Ethos has launched its latest multi-brand boutique spread across an area of 941 sq. ft. located at ML Acropolis Mall in Siliguri, West Bengal. Earlier, the company had signed an exclusive retail partnership with Tutima to introduce the revered Glashutte-based brand in India.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

Earlier, the company had launched its latest multi-brand boutique in Siliguri

Ethos is currently trading at Rs. 979.20, up by 15.10 points or 1.57% from its previous closing of Rs. 964.10 on the BSE.

The scrip opened at Rs. 970.05 and has touched a high and low of Rs. 997.35 and Rs. 918.00 respectively. So far 4791 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 1145.35 on 16-Aug-2022 and a 52 week low of Rs. 711.60 on 06-Jun-2022.

Last one week high and low of the scrip stood at Rs. 997.35 and Rs. 918.00 respectively. The current market cap of the company is Rs. 2288.22 crore.

The promoters holding in the company stood at 64.68%, while Institutions and Non-Institutions held 16.80% and 18.52% respectively.

Ethos has entered Bhopal with the launch of its first multi-brand boutique in the city, spread across an area of 506 sq. ft. located at DB City Mall, Maharana Pratap Nagar. Earlier, the company had launched its latest multi-brand boutique spread across an area of 941 sq. ft. located at ML Acropolis Mall in Siliguri, West Bengal.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

The equity shares of the company will be listed on BSE and NSE

Ethos is coming out with an initial public offering (IPO) to raise around Rs 472 crore. The issue will open on May 18, 2022 and will close on May 20, 2022. It has fixed a price band of Rs 836- 878 per share. The equity shares of the company will be listed on BSE and NSE.

Proceeds from the fresh issuance will be utilized for repayment of the debt, funding working capital requirements, opening new stores, and general corporate purposes. Emkay Global Financial Services and InCred Capital Wealth Portfolio Managers are the book-running lead managers to the issue.

Ethos has the largest portfolio of premium and luxury watches in India and retails 50 premium and luxury watch brands like Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F Bucherer, Tissot, Raymond Weil, Louis Moinet and Balmain.

GPHG is a public interest organization, created in 2001, whose mission is to strengthen the art of watchmaking

Ethos is all set to bring the prestigious ‘Grand Prix d'Horlogerie de Geneve’ (GPHG) to India, with an exhibition of the finalists for the 2022 Awards. Some of the world's most unique and exquisite timepieces, contesting for awards across 15 categories, will be on display. In addition, the event will come as a unique opportunity for Indian connoisseurs to meet renowned watch experts and collectors from all over the world.

GPHG is a public interest organization, created in 2001, whose mission is to strengthen the art of watchmaking and uphold excellence by honouring and rewarding ground-breaking horological creations every year.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

The company will be their exclusive retailer in the Indian market

Ethos has signed a partnership with Swiss Watch Manufacturer ‘Speake-Marin’ to be their exclusive retailer in the Indian market. The timepieces by Speake-Marin will be exclusively available with Ethos Watch Boutiques and will include timepieces such as One & Two Dual Time and City Ripples.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.
 

With this partnership, Ethos Watch Boutiques will exclusively retail Trilobe across India and the selection will be available from early 2023

Ethos has signed an exclusive partnership deal with contemporary watch brand Trilobe, to bring the finest of haute horlogerie to the Indian market. With this partnership, Ethos Watch Boutiques will exclusively retail Trilobe across India and the selection will be available from early 2023. The core range will include models from all Trilobe watch collections - Les Matinaux, Nuit Fantastique, Secret, and Une Folle Journee.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

Ethos will exclusively retail their sporty and performance-driven timepieces across the country

Ethos has signed an exclusive retail partnership with Tutima to introduce the revered Glashutte-based brand in India. Through this partnership, Ethos will exclusively retail their sporty and performance-driven timepieces across the country. The selection, to be available from early 2023, will include watches from the sought-after M2 collection, Saxon One, Grand Flieger, and Patria.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

The brand is well-known for its functional, purpose-driven timepieces that are now live on the Ethos website

Bell & Ross, a French watchmaking brand that designs reliable, high precision watches, will now be exclusively available with Ethos as part of a strategic partnership. The brand is well-known for its functional, purpose-driven timepieces that are now live on the Ethos website. The selection, including models from the Instrument, Urban, and Concept collections, will also be available at selected Ethos stores later this month.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

The multi-brand boutique is located at ML Acropolis Mall in Siliguri, West Bengal

Ethos has launched its latest multi-brand boutique spread across an area of 941 sq. ft. located at ML Acropolis Mall in Siliguri, West Bengal. Earlier, the company had signed an exclusive retail partnership with Tutima to introduce the revered Glashutte-based brand in India.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.

Earlier, the company had launched its latest multi-brand boutique in Siliguri

Ethos has entered Bhopal with the launch of its first multi-brand boutique in the city, spread across an area of 506 sq. ft. located at DB City Mall, Maharana Pratap Nagar. Earlier, the company had launched its latest multi-brand boutique spread across an area of 941 sq. ft. located at ML Acropolis Mall in Siliguri, West Bengal.

Ethos has the largest portfolio of premium and luxury watches in India and retails over 50 premium and luxury watch brands.