Ethos: India’s Luxury Watch Opportunity - A Hidden Gem?

India’s watch market is moving up the value chain, and Ethos Limited is emerging as a direct play on this premiumisation. The market, estimated at US$4.19 billion in 2025, could reach US$7.52 billion, or about ₹71,000 crore, by 2031. Ethos has built a strong position in luxury watches, with 103 boutiques across 34 cities and a portfolio of 85+ global brands. More importantly, it has 64 exclusive brand partnerships, creating a competitive moat and helping it command higher prices. Its average selling price rose to ₹2.26 lakh in Q1FY27 from ₹1.49 lakh in FY22. Over five years, revenue grew at a 33% CAGR to ₹1,612 crore in FY26, while net profit grew at an impressive 82% CAGR to ₹96 crore. In Q1FY27, revenue increased 33.3% YoY to ₹461.7 crore, supported by 13.2% same-store sales growth. EBITDA rose 44.1% to ₹74.8 crore, lifting the margin to 16.2%, while net profit jumped 52.6% to ₹29 crore. Its pre-owned watch business, Second Movement, targets a market growing at about 11% annually. Lower Swiss-watch import duties, which are expected to move from 15.71% in 2026 towards zero by 2031, could further support demand. There are risks. FY26 profitability faced pressure from the sharp Swiss Franc appreciation and expansion costs. Consolidated PBT was ₹130.9 crore, while PAT was ₹94.8 crore. Return on capital also fell as the company invested for future growth. For shareholders, Ethos offers a compelling long-term growth story: rising affluence, premiumisation, exclusive brands and operating leverage can drive earnings faster than revenue. The opportunity is strong, but sustained execution is essential. Execution remains a key risk for shareholders.