Ethos Ltd

Ethos Ltd reported robust financial growth for FY25, with revenue increasing by 25.3% year-on-year to INR 1,252 crores. EBITDA pre-Ind AS grew by 23.5% to INR 161 crores, and Profit Before Tax pre-Ind AS rose by 21.3% to INR 141 crores. The company also noted an overall volume growth of 15.5% and an average selling price growth of 7.4% for the year.

The company successfully inaugurated 14 new boutiques in FY25, bringing the total count to 73 across 26 cities. While the initial target was to open over 20 boutiques, several openings were delayed due to unforeseen challenges, including 90 days of disruption from GRAP IV restrictions in Delhi NCR. However, 8 boutiques initially slated for the last financial year have recently opened, and the company aims to cross 100 boutiques in the current financial year.

Ethos launched 'City of Time' in Gurgaon on May 10th, India's largest horological project spanning over 22,000 square feet. This flagship features five exclusive brand boutiques, two multi-brand galleries, and over 50 independent brands. The strategic choice of Gurgaon is due to its rapid growth, and the project aims to set global benchmarks for luxury retail. Two more exclusive brand boutiques are planned for City of Time in the next quarter.

Ethos is actively diversifying its luxury portfolio, launching its first Messika boutique in New Delhi on May 14th, marking its entry into the international luxury jewellery segment. Following the success of its first Rimowa boutique (generating INR 20-24 crores in billing value), a second Rimowa boutique is under construction in Delhi, and a third is planned. The company has also signed another American luggage brand, reinforcing its presence in the premium luxury lifestyle category.

The pre-owned segment, branded 'Second Movement,' continues to show strong traction, growing over 30% year-on-year, with customers increasingly trusting the company's processes. As part of international expansion, Ethos established a wholly-owned subsidiary, Ficus Trading LLC, in the UAE. This exploratory step aims to assess opportunities in the pre-owned market, aftersales service, and potential for retailing Favre Leuba in the region.

Inventory increased from INR 440 crores on March 31, 2024, to INR 593 crores on March 31, 2025. This elevation is attributed to strategic expansion, the addition of 14 new boutiques, and proactive stocking for new store launches. Management expects working capital to normalize over time as new boutiques ramp up revenue, acknowledging that inventory lands on day one while revenue takes time to catch up.

Gross margins picked up to 31% in Q4 FY25. Management believes long-term sustainability is achievable, despite volatility in the CHF INR exchange rate. A prudent hedging strategy covering approximately 50% of foreign currency exposure through forward contracts has been implemented to protect against rupee depreciation while maintaining flexibility for favorable currency movements. The company aims to increase margins long-term through better product mix and lower discounting.

The EFTA agreement with Switzerland is expected to be effectively in place by the end of 2025, with benefits flowing in by then. Ethos plans to share gains from this agreement with brands and expects it to facilitate more SOR (Sale or Return) arrangements once duties are lowered. The company reiterated its long-term vision to grow revenue 10x over 10 years, driven by sustained investment in boutique expansion, brand visibility, and deeper customer engagement.