Ethos starts FY27 with 33 percent revenue growth and a bigger boutique footprint

Ethos Limited opened FY27 with a strong first quarter, combining rapid revenue growth with steady profitability and visible progress on store expansion. For the quarter ended June 30, 2026, consolidated revenue from operations rose to ₹461.7 crore, up 33.3 percent year on year. Normalized EBITDA without Ind AS 116 grew faster than revenue, up 45.0 percent to ₹53.1 crore, lifting the normalized EBITDA margin to 11.2 percent from 10.4 percent a year ago. On a reported basis, EBITDA was ₹74.8 crore with a margin of 15.7 percent.

Profitability also moved up. Consolidated normalized PBT without Ind AS 116 increased 44.9 percent to ₹42.2 crore. On a reported basis, PBT was ₹39.1 crore, and PAT after minority interest was ₹28.1 crore, up 47.9 percent year on year. Basic EPS for the quarter stood at ₹10.51.

Management framed the quarter as a solid start delivered during an ongoing investment cycle. The company highlighted resilience in Indian luxury demand, the breadth of its brand portfolio, and continued focus on customer experience across formats as key drivers.

Growth engine in retail: stores, cities, and new customers

Ethos continues to treat physical expansion as the core operating lever, and Q1 FY27 showed that strategy in motion. The boutique network moved from 94 boutiques across 30 cities at the end of FY26 to 103 boutiques across 34 cities as of August 3, 2026, taking the company past the 100 boutique mark. During Q1 FY27, the company opened nine boutiques, including two exclusive and seven multi brand locations. Same store sales growth for the quarter was 13.2 percent, indicating that growth came from both new stores and higher throughput in the existing network.

The expansion also widened the geographic base. Ethos entered four new markets during the quarter: Agra, Faridabad, Amritsar, and Visakhapatnam. These additions matter because Ethos is explicit about the link between demand for luxury products and the rise in high net worth individuals. More cities and more touchpoints improve brand visibility, support faster conversion of new customers, and strengthen after sales relationships.

The company also continued to extend its footprint into high traffic locations and premium formats. Examples cited include a watch boutique at Indira Gandhi International Airport in New Delhi and continued expansion in large cities. Post quarter, the company added one more watch boutique in Q2 FY27 so far, with the first boutique in Amritsar highlighted as a new entry.

Underneath the footprint growth, product mix stayed premium. The share of luxury and high luxury watch sales remained at 71 percent in Q1 FY27, unchanged from Q1 FY26 and consistent with FY26. Average selling price per watch rose to ₹226 thousand in Q1 FY27 from ₹213 thousand in Q1 FY26, extending a multi year trend where ASP has moved from ₹145 thousand in FY22 to ₹207 thousand in FY26 and then higher in the current quarter.

Financial performance: faster EBITDA growth and steady gross margin

The quarter’s profit shape reflects a familiar retail pattern: strong revenue growth with stable gross margin, offset by operating investments that still allow operating leverage to show through. Without Ind AS 116, consolidated gross profit rose to ₹135.5 crore from ₹99.1 crore, up 36.8 percent year on year. Gross margin improved to 29.4 percent from 28.6 percent.

Operating costs rose as the network expanded. Employee costs increased to ₹37.0 crore from ₹23.8 crore and other expenses increased to ₹58.8 crore from ₹44.5 crore. Even with these costs, normalized EBITDA including other income improved to ₹53.1 crore from ₹36.6 crore. Normalized EBIT increased to ₹44.3 crore from ₹30.5 crore, and normalized PBT grew to ₹42.2 crore from ₹29.1 crore.

On a reported basis, the company showed higher EBITDA and depreciation because of Ind AS 116. Reported EBITDA for Q1 FY27 was ₹74.8 crore versus ₹52.0 crore last year. Depreciation increased to ₹26.1 crore from ₹19.0 crore and finance cost increased to ₹8.0 crore from ₹5.7 crore, which is consistent with lease accounting effects.

One item to watch in headline profits is the impact of associates. Consolidated PBT includes a share of loss from associates of ₹1.6 crore in Q1 FY27. Management noted one time expenses linked to participation in Watches and Wonders Geneva 2026 being included in the quarter.

Financial summary (Consolidated)

Standalone strength and the role of Ethos Lifestyle

Standalone performance remained strong, and the reported split highlights how Ethos is structuring its newer business lines. Without Ind AS 116, standalone revenue from operations was ₹450.5 crore in Q1 FY27, up 30.1 percent year on year. Normalized EBITDA including other income rose to ₹49.7 crore from ₹36.7 crore, a 35.4 percent increase, with the margin at 10.8 percent. Normalized PBT was ₹41.0 crore.

The company clarified that standalone PBT reported in Q1 FY27 excludes Ethos Lifestyle’s PBT of ₹2.9 crore. On a like for like basis including Lifestyle, Ethos standalone PBT for the quarter would be ₹43.9 crore compared with ₹30.5 crore a year ago, translating to year on year growth of 43.9 percent.

This nuance matters for investors tracking profitability as the company expands beyond watches. Ethos Lifestyle is described as a way to extend Ethos’ retail infrastructure to serve aspiring Indian customers in more ways. The company is selectively onboarding global brands and is also developing new concepts and intellectual property in this space. The Lifestyle footprint includes a Messika boutique at The Chanakya in New Delhi and Rimowa boutiques at DLF Emporio in New Delhi and Jio World Plaza in Mumbai.

At a group level, the corporate structure shows several operating and enabling entities: Cognition Digital LLP for technology, Micron Watch Service for service centres, Ficus Trading LLC for trading of watches and spare parts, and wholly owned entities including Favre Leuba GMBH. This structure suggests Ethos is building capabilities around retail, service, and distribution rather than staying a pure storefront business.

Brands, product mix, and global validation via Silvercity

Ethos added six new watch brands in Q1 FY27. While the presentation lists Reservoir, Hamilton, and Cyrus Genève with descriptions, and also includes Daniel Roth, Gérald Genta, and Epos, the key point is that brand additions remain active even as the company scales stores. A deeper brand bench can help attract new collectors, improve cross selling within boutiques, and reduce dependence on any single marquee label.

Management also emphasized momentum at Silvercity Brands AG, in which Ethos has a 33.88 percent associate stake. Silvercity Brands AG debuted at Watches and Wonders Geneva in April 2026, described as one of only 66 exhibiting maisons and among a small group of first time entrants admitted that year. The company positioned this as external validation of the brand’s long term potential, achieved within roughly 18 months of relaunch, after an earlier launch at Geneva Watch Days in August 2024.

Financially, associates are still a drag in the quarter, with a ₹1.6 crore share of loss in Q1 FY27. But strategically, the focus is on positioning and long term brand equity. For investors, the short term impact is visible and disclosed, while the long term upside remains more qualitative.

What Q1 FY27 says about execution and the road ahead

The quarter’s results show a company still in build mode but generating healthy operating leverage. Revenue grew over 33 percent, and normalized EBITDA without Ind AS 116 grew faster at 45 percent. Gross margins edged higher, and the reported profit line moved up sharply, with PAT after minority interest rising nearly 48 percent.

The operational narrative is equally important. Hitting 103 boutiques across 34 cities makes scale a competitive moat in luxury watch retail, where customer trust, after sales support, and the ability to access scarce supply can differentiate a retailer. The company is also explicit that it intends to continue the investment cycle while building for the long term. That implies near term cost pressures can continue as more stores and formats come online, but it also signals confidence in demand.

Two other indicators support that view. Same store sales growth of 13.2 percent suggests growth is not only store led. And average selling price increased to ₹226 thousand, while the luxury and high luxury mix held at 71 percent, pointing to stable premium positioning.

The key theme emerging from the quarter is disciplined expansion with stable economics. Ethos is widening its reach into new cities while keeping the product mix premium and lifting profitability. If the company can sustain store productivity as the network scales beyond 100 boutiques, the model can continue to compound.

Investor takeaways

Ethos began FY27 with strong demand led growth and improved profitability. The numbers show faster EBITDA growth than revenue, stable gross margin, and sharp improvement in reported PAT. The operating story is clear: expansion remains the main lever, supported by a premium product mix and a growing luxury customer base. Near term, investors will keep watching how costs track as the boutique network expands further and how associate losses evolve. But the quarter reinforces that the company is executing its playbook with consistency.