KDDL (Ethos Watches) - Scalable business model at an inflection point?

Q3 results on Feb 14th

Fingers crossed :crossed_fingers: weā€™ll have a happy Valentineā€™s Day :crossed_fingers:

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Ethos results announced. Couldnā€™t have got closer. Revenue of 375 crores posted by the company :rofl::rofl::rofl:

Disc: Invested & biased

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Summary of the investor PPT by chatgpt:

Summary of Ethos Limited Q3 & 9M FY25 Financial Performance Presentation

Financial Highlights

  • Revenue Growth:
    • Q3 FY25: ā‚¹369.9 crore (31.5% YoY increase)
    • 9M FY25: ā‚¹940.3 crore (26.0% YoY increase)
  • EBITDA Growth:
    • Q3 FY25: ā‚¹62.8 crore (23.6% YoY increase)
    • 9M FY25: ā‚¹160.7 crore (22.8% YoY increase)
  • Profit After Tax (PAT):
    • Q3 FY25: ā‚¹29.5 crore (15.6% YoY increase)
    • 9M FY25: ā‚¹73.5 crore (18.0% YoY increase)
  • EBITDA Margin:
    • Q3 FY25: 16.7% (down from 17.7% in Q3 FY24)
    • 9M FY25: 16.8% (down from 17.2% in 9M FY24)
  • Average Selling Price: ā‚¹2,07,513 (+11.2% YoY)
  • Luxury & High-Luxury Watch Share: Increased from 68% to 71% (YoY)

Business Expansion & Operational Highlights

  • Store Expansion:
    • 5 new stores opened in Q3 FY25 (total 13 new stores in 9M FY25).
    • Total store count: 73 across 26 cities.
    • Entered three new cities: Dehradun, Kochi, and Mangaluru.
    • Opened a second duty-free store at Bengaluru Airport.
  • Digitally Assisted Sales: Grew by 53.9% in Q3 FY25 and 32.9% in 9M FY25.
  • New Brand Partnerships:
    • Added 3 exclusive brands in Q3 FY25 (Christian van der Klaauw, Carl Suchy & Sƶhne, Zero Halliburton).
    • Signed 6 exclusive partnerships since April 2024.
    • Exclusive brand sales contributed 29.7% of revenue in Q3 FY25.

Challenges & Strategy

  • Operational Challenges:
    • Increased costs due to new store manpower and rent.
    • Construction delays due to pollution-related restrictions in Delhi/NCR (52 days of restrictions affecting 75 days of operations).
  • Future Strategy:
    • Plan to open 6 more boutiques by FY25.
    • Focus on talent acquisition and development.
    • Targeting 10x revenue growth over the next decade.

Conclusion

Ethos Limited demonstrated strong revenue growth and continued expansion in Q3 & 9M FY25, with a focus on luxury brand partnerships, digital sales, and store openings. Despite some margin pressure from expansion costs, the company remains committed to its long-term growth strategy.

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