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Business News/ Markets / Stock Markets/  Multibagger Stock: Ethos soared over 160% in a year, climbed 190% from IPO price
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Multibagger Stock: Ethos soared over 160% in a year, climbed 190% from IPO price

Ethos, a leading player in luxury watch retail, has seen its shares rise by 166% to ₹2,542 from ₹959 a year ago. Over the past 12 months, the stock closed positively for 8 months. On March 11, the it touched a new all-time high of ₹3,044 per share.

Multibagger stock: Ethos is currently trading at a substantial 190% premium over its IPO price. (Bloomberg)Premium
Multibagger stock: Ethos is currently trading at a substantial 190% premium over its IPO price. (Bloomberg)

Ethos, a prominent player in the premium and luxury watch retail sector, has witnessed a consistent uptrend in its shares since April 2023, showing no significant declines. Presently, the company's shares stand at 2,542 each, marking a remarkable 166% increase from their value of 959 per share a year ago.

Over the past 12 months, the stock closed positively for 8 months, with April 2023 marking the highest monthly gain at 35.33%, followed by a recent surge of 19.61% in January. On March 11, the stock reached an all-time high of 3,044 per share.

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Having debuted on Indian stock exchanges on August 9, 2021, with an initial price of 803 per share, compared to its issue price of 878, the stock initially faced some challenges. However, it gained traction in subsequent months and is currently trading at a substantial 190% premium over its IPO price.

With more than 60 stores in India, Ethos Watches is India’s largest chain of luxury watch boutiques. The luxury watch market has experienced significant growth in recent years, and this trend is expected to continue in the coming years due to the growing demand. 

Ethos has a sizeable portfolio of premium and luxury watches in India, enabling it to retail over 60 premium and luxury watch brands like Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F. Bucherer, Tissot, Raymond Weil, Louis Moinet, and Balmain.

Also Read: Reliance, Sun, Tata Motors, M&M, Maruti among top 10 key gainers in 2024 that led the rally in the Sensex past 75,000

The Road Ahead

According to Impactful Insights, the Indian luxury watch market is expected to grow at a compound annual growth rate (CAGR) of 19.4% between 2024 and 2032. 

This growth can be attributed to several factors, including the increasing population of the middle and upper-middle class, evolving lifestyle and fashion preferences among Indian consumers, and a growing emphasis on personal branding and individuality.

Earlier, domestic brokerage firm, Axis Securities highlighted Ethos's strategic moves, including its entry into the fast-growing Certified Pre-Owned (CPO) segment, an increase in the share of high-margin exclusive brands in its portfolio, and diversification into other rapidly expanding luxury segments such as luggage (Rimowa) and jewellery (Messika and Bvlgari).

Also Read: Sensex took just 24 sessions to jump from 74k to 75k; a look at its journey from 1,000 till date

According to the brokerage's calculations, the company’s EBITDA margin is likely to expand 100 basis points to 15.6% by FY26E from 14.5% in FY23, led by an improved product mix, a gradual increase in the ASP (average selling price), exclusive brand portfolio store expansion and operating leverage, and increasing CPO business, further improving the company’s ROCE from 16% in FY23 to 20% in FY26E.

The brokerage anticipates robust CAGR growth for the company in terms of revenue (35%) and PAT (42%) over FY23–26E. This positive trajectory is expected to enhance the overall return profile for the company, it added.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 09 Apr 2024, 12:27 PM IST
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