Small-cap watch retailer's exclusive partnership with Swiss manufacturer sends stock soaring to fresh 52-week high!

Small-cap watch retailer's exclusive partnership with Swiss manufacturer sends stock soaring to fresh 52-week high!

by 5paisa Research Team Last Updated: Apr 20, 2023 - 12:31 pm 611 Views
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If you're looking for a stock that's been performing exceptionally well in an otherwise subdued market, look no further than Ethos Ltd, India's largest luxury and premium watch retailer.

The company has managed to secure market leadership in the certified pre-owned watch sector, in addition to its strong retail presence and industry domain, making them a force to be reckoned with in the luxury watch market. 

Stock performance

The stock has been soaring like a lion, recently jumping more than 7% and marking a fresh high on NSE. What's even more impressive is the fact that this price rise has been accompanied by a spike in volume, with the first half of the trading session already seeing over 1 lakh in volume. This stock has come a long way since its initial hardships, with its listing at a discount of 6% on NSE from its offer price of Rs 878 in May of last year. 

So, what's driving this impressive performance? 

Ethos Ltd recently announced an exclusive partnership with Swiss watch manufacturer Laurent Ferrier, which is sure to draw attention from patrons across the country eager to access their incredible timepieces. This exciting news is just one example of the many long-term tailwinds that will continue to strengthen Ethos Ltd's business.

India's watch market is projected to grow at a CAGR of 10.6% to reach Rs 22,300 crore by 2025, with premium segments growing even faster at a CAGR of 12.9%. Luxury segments, in particular, are growing even faster at a CAGR of 12.9%, driven by urbanization, aspirational lifestyles, and growing disposable incomes. These are all long-term tailwinds that Ethos Ltd can leverage to further expand its business. Additionally, the company's pre-owned business is expected to increase the overall industry size, with industry experts predicting that the certified pre-owned watch segment will become half the size of the global watch industry by 2025. 

Quarterly Performance 

In Q3FY23, Ethos Ltd's sales grew by nearly 18% YoY from Rs 195 crore to Rs 230 crore, with operating profit swelling to Rs 36 crore from Rs 26 crore in the same quarter in the previous financial year. Operating margin firmed up to 16%, and net profit skyrocketed nearly 75% to Rs 21 crore. With such impressive financials, exciting partnerships, and long-term tailwinds, it's no surprise that Ethos Ltd's stock is roaring like a lion.

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