Company Overview

Ethos Limited, India's largest luxury watch retailer, reported strong financial performance for FY26 with standalone revenue growth of 29.5% to ₹1,653.12 crore and consolidated revenue of ₹1,658.41 crore. The company maintained profitability with profit after tax of ₹94.92 crore (standalone) and ₹94.77 crore (consolidated), despite headwinds from Swiss Franc appreciation and statutory impacts of new labour codes.

Financial Performance

Revenue from operations reached ₹1,61,259.61 lakhs (₹1,612.60 crore), representing 28.8% growth year-over-year. The company achieved an average selling price of ₹2.07 lakh per watch with total billing of ₹1,849.4 crore. EBITDA stood at ₹240.8 crore including statutory impacts. Earnings per share were ₹36.27 (basic/diluted). The balance sheet strengthened significantly with total assets of ₹1,99,649.49 lakhs and cash equivalents growing to ₹1,440.79 million from ₹284.80 million in FY25.

Capital Structure & Fundraising

Ethos successfully completed a rights issue of 22,77,250 equity shares at ₹1,800 per share, raising ₹409.90 crore. This increased paid-up capital to ₹26.76 crore divided into 2,67,57,693 equity shares. Unutilized proceeds of ₹300.01 crore were temporarily invested in bank deposits. Promoter holding remained at 50.12% with KDDL Limited holding 43.07% and Mahen Distribution Limited at 7.04%. ICICI Prudential Flexicap Fund held 7.61% as a significant non-promoter shareholder.

Operational Expansion

The company expanded aggressively, increasing from 73 to 94 boutiques during FY26 and reaching 103 boutiques across 34 cities by the report date. New market entries included Ranchi, Jodhpur, Srinagar, Kanpur, Agra, Faridabad, Visakhapatnam, and Amritsar. The brand portfolio expanded with 4 new exclusive brands, maintaining partnerships with over 80 global watch brands. Digital engagement saw 30.55 million website visitors and 553K social media followers.

Subsidiaries & Investments

Ethos Lifestyle Private Limited saw ownership diluted from 100% to 75.05% through preferential issues. New subsidiaries included Ficus Trading LLC in Dubai (incorporated June 2025) with initial investment of ₹69.87 lakhs, and Micron Watch Services Private Limited (50.1% ownership) focusing on watch service and repair. Associate investments included Silvercity Brands AG (33.88% ownership) with group share of loss at ₹43.35 million, and Pasadena Retail Private Limited joint venture (50% ownership) with group share of loss at ₹2.45 million.

Audit & Compliance

Walker Chandiok & Co LLP issued an unmodified audit opinion, confirming clean financial statements and adequate internal financial controls. Inventory existence and valuation was identified as a key audit matter due to high value (32% of total assets) across multiple locations. The company paid penalties for delayed SEBI filings including ₹10,000 each to NSE and BSE for board meeting intimation delays, and ₹1,34,000 to NSE for improper Audit Committee constitution.

Risk Management & Contingencies

The company maintained significant foreign currency exposure (CHF, USD, AED, GBP, EUR) with forward contracts outstanding of CHF 18.37 lakhs (₹217.31 million). A 5% strengthening of CHF would decrease profit before tax by ₹70.37 lakhs. Contingent liabilities included tax matters of ₹534.34 lakhs, GST disputes of ₹1,866.95 lakhs, and other regulatory disputes under resolution.

Corporate Governance & CSR

The board comprised 8 directors (3 executive, 5 independent including 1 woman director) with 9 meetings held during FY26. CSR expenditure reached ₹2.2 crore focused on environmental initiatives including the Million Tree Project with Sankalptaru Foundation and SayTrees, along with community health and rural livelihood programs. Employee strength exceeded 1,100 with 21% women representation.

Forward Outlook

Ethos aims to continue expansion into Tier 2 and Tier 3 cities, scale its pre-owned business (Second Movement), and enhance digital capabilities. The company targets tenfold growth within a decade of listing (by 2032), leveraging India's growing luxury watch market where Swiss watch exports grew 35% in two years to CHF 296 million in 2025.