Ethos soars over 9% on upbeat Q4 results; stock up 18% so far in 2024

So far this year, the stock of Ethos surged over 18 percent, outpacing benchmark Nifty 50 that rose 2 percent

Shares of luxury watch player Ethos soared over 9 percent to Rs 2,324 on May 14 after it reported an upbeat January-March quarter (Q4FY24) performance.

So far this year, Ethos has surged over 18 percent, outpacing the benchmark Nifty 50 that rose 2 percent. The company's shares had hit a 52-week high of Rs 3,040 per share on March 11, 2024.

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Ethos's consolidated revenue from operations rose 21.7 percent year-on-year (YoY) to Rs 252 crore in Q4FY24, while profit-after-tax (PAT) surged 58 percent YoY to Rs 21 crore.

On the other hand, Ethos's earnings before interest, tax, depreciation, and amortisation (EBITDA) jumped 45.1 percent YoY to Rs 44 crore in Q4FY24 and EBITDA margins improved 260 basis points (bps) YoY to 17 percent.

Ethos unveiled 10 new boutiques across 9 cities, including expansion in 4 new cities. Looking ahead, Pranav Saboo, Founder and Managing Director of Ethos, said that the company would continue expanding its physical as well as digital presence.

"With strategic plans in motion, we're confident in achieving sustained growth and delivering value to all stakeholders," Saboo said in a regulatory exchange filing.

Earlier, analysts at Axis Securities recommended a 'buy' rating on Ethos, with a near-term target price of Rs 2,577 per share. "We expect the company’s EBITDA margin to expand by 100 bps to 15.6 percent by FY26E from 14.5 percent in FY23. This will be led by improving product mix, store expansion or operating leverage, and increasing CPO business by improving company's ROCE to 20 percent by FY26E."

Ethos is a prominent player in India's luxury and premium watch retail industry. With a 20 percent market share in the luxury segment and a 13 percent share in the premium segment, it stands as one of the largest retailers in the country. Ethos caters to over 60 premium and luxury watch brands, including 46 exclusive brands available solely at Ethos outlets.