It might be to have a dedicated trading arm based out of Switzerland to meet the local compliances and tax regulations better.
Here is the link to the twitter thread I wrote on Ethos. Curious to know your thoughts:
1 Like
IMO smart watches might not necessarily be a risk for the luxury watch segment Ethos caters to. The costliest smart watch currently would be around 40k apple watch and more and more people are able to afford it similar to smartphones. The end customers of luxury watches would ideally want it more as a representation of status, their own unique fashion statement and would want their watch to stand out.
I’d like to know what competitive strength Ethos would have over other players in terms of margins like Helios(Titan owned) and other promoter groups who can burn a lot of cash to set up retail stores considering the surge in demand for this segment.
Retail stores can definitely be setup with enough amount of capital. But the long standing relationships with brands is hard to create. This brand equity has lead to collection of Ethos exclusive brands. Although its not impossible to replicate, it tough. Plus its not big as a market as, say Jewelry is, to deploy capital and move the needle for very large corporates like Birlas or reliance
As far as Titan is concerned they have high value/premium brands but there focus is not on the luxury category which is the fastest growing are.
1 Like
Helios does not operate a super premium segment. E.g. You can buy a Seiko from Helios but not a Rolex.
3 Likes
Ethos Ltd [#Q4FY23]
Good noa Rev. 208 cr vs 159 cr YoY 31% up
EBITDA 31 cr vs 23 cr 33% up
Margin 14.4% vs 14.3% YoY vs 16.9% in Q3FY23
PAT 13 cr vs 8 cr 69% up
2 Likes
It it not vise to invest in KDDL instead of Ethos, KDDL holds 51% stake in Ethos, the 51% stake value more than the market cap of KDDL, so you are getting other business for free. They also have Dial Manufacturing business as well.
Anyone please let me know your thoughts? is this understanding correct?
4 Likes
KDDL is a holding company that owns Ethos as one of its subsidiaries. As a holding company, KDDL enjoys certain advantages due to its ownership of Ethos. However, it is important to note that holding companies generally trade at a discount compared to the valuations of their operating companies. This discount can be attributed to various factors.
Despite the advantages of being a holding company, KDDL may still face a discount in its valuation compared to Ethos. This is primarily because the market tends to value the individual operating companies more favourably than the holding company that owns them. Investors often perceive holding companies as being more complex, less focused, and potentially subject to greater risks.
When considering an investment decision in KDDL, it is crucial to take into account the discount associated with holding companies. This discount implies that the market may undervalue KDDL relative to the intrinsic value of its underlying assets, including Ethos. One should carefully evaluate the potential risks and rewards associated with investing in a holding company and consider the impact of the discount on their investment returns.
Disclosure : Does not constitute a buy or sell recommendation for KDDL or Ethos. Holding Ethos in my portfolio hence biased towards it.
5 Likes
I believe the discount between KDDL and Ethos will be lower as compared to any other holding company as KDDL Dial business is growing well, margins are also good and generating good profit as well. For Luxury watches, KDDL is one of the dominant supplier of watch parts and is pioneer in the business of Dials.
Other holding company like Kama Holding trades at high discount due to its Other businesses which are loss making.
In fact KDDL Standalone business is having higher Gross margin and EBITDA margin
KDDL Dial Business:
Ethos standalone margins. way lower than dial business
Ethos Standalone.
KDDL consolidated numbers including Ethos (dilution in margin due to Ethos business)
3 Likes
Hi All,
Hiren Ved from Alchemy capital talks about Ethos Ltd in one of his videos with Groww. Future multibaggers in the making? | Market ki Baat with Hiren Ved of Alchemy Capital - YouTube
Disc: Not invested. Just tracking
5 Likes
Just trying to connect the dots ( My personal view)
Though KDDL is holding company of Ethos, what makes it different from other holding copanies, is its own business of manufacturing and supplying watch dial & watch hands to swiss luxury brands like Swatch, Tag Heuer, Gucci, Edox, etc.( Source - screener.in)
Even after the trend of Smart digital watches, the craze of the premium watches is not dying and in fact, its increasing. So growth looks eminent for both Ethos & KDDL.
So whats the Dot to Connect ?
I am comparing KDDL to RACL geartech. RACL manufactures and exports gears for premium bikes in Europe. So this is nearly same thing what KDDL is doing. So for KDDL, future looks good just like RACL geartech.
Again personal opinion.
Disclosure - Biased as invested from 1500 levels and avergaging up slowly. Now 2.5% of portfolio.
regards,
dr.vikas
6 Likes
Sale growth rate is 17% and profit growth rate is 75% why?
How to analysis this qurey further?
Ethos Limited is a company that has taken certain financial actions. They have closed their process for selling a portion of their shares to institutional buyers. These shares were priced at Rs. 1,547 each, with a premium included. The company also finalized the documents related to this sale and confirmed the allocation of shares to the institutional buyers.
Good results by KDDL
https://www.bseindia.com/xml-data/corpfiling/AttachLive/e2ac5586-4d1f-4987-8d1e-52d5a23be0b6.pdf
Invested with an average price of 1800. Biased.
2 Likes
Latest Investor presentation by KDDL
Capex plan for the next 2 years.
Hope you find it helpful
dr.vikas
3 Likes
What is this bracelets about?
Is the demand of bracelets are so high that need a separate factory?
Is it worth to put 25 crs for same? Is this a good capital allocation?