Any current/future new fundraising through debt or equity?

KDDL completed a rights issue raising Rs.25 Crores during the current year; Rs.18.75 Crores of this is planned to be invested in its subsidiary Ethos Limited (Page 4). Ethos Limited has an ongoing rights issue approved by its board for up to Rs.25.5 Crores through issuance of equity shares at Rs.550 each; KDDL (holding ~77% in Ethos) will participate in this rights issue (Page 4). There is no explicit mention of any new debt fundraising during the call. The company is closely monitoring capital markets conditions for any potential IPO or demerger of Ethos but no final decision or timeline is s

Future growth expectations in sales/revenue/volumes?

KDDL expects strong growth in both manufacturing and retail segments post-COVID recovery. Watch component manufacturing revenue grew 53% YoY, precision engineering by 33% YoY, signaling healthy momentum. Ethos retail business targets Rs.1000 Crores turnover with 10% EBITDA in 3-5 years. India is at a threshold per capita income (~$2500) where luxury consumption is expected to accelerate. Luxury segment anticipated to grow in healthy double digits fueled by rapid wealth growth in high-income segments. Expansion plans include luxury categories beyond watches like luggage (Rimowa franchise), and

Future growth expectations in earnings/operating earnings/profits/EPS?

Ethos aims to achieve an EBITDA margin of about 10-11% in the next two years as operating leverage kicks in and higher margin exclusive brands gain share. Ethos' revenue target is ₹1,000 Crores with 10% EBITDA within 3-5 years, with strong double-digit growth expected in luxury consumption driven by rising Indian GDP and wealth. The jump in Ethos’ valuation and rights issue reflects positive future growth expectations and strong investor confidence. KDDL’s manufacturing businesses, including watch components and precision engineering, are expected to sustain healthy growth post-pandemic with e

Current/ Expected Orderbook/ Pending Orders?

The transcript does not provide explicit current or expected order book or pending orders figures for KDDL Limited. However, it mentions a positive demand outlook with customers ramping up their watch manufacturing activities leading to better order inflows. The precision engineering business is witnessing a healthy flow of inquiries and RFQs (Request for Quotations) from large accounts, mainly in the export market, indicating a robust order pipeline. Despite COVID-19 related slowdowns, especially in aerospace and defense, demand and orders are expected to pick up rapidly in the coming quarter

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KDDL LtdQ3 FY21Consumer Durables

KDDL Ltd Q3 FY21 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹3,170P/E: 32.8Market Cap: ₹2.8K CrSector: Consumer Durables

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→KDDL expects strong growth in both manufacturing and retail segments post-COVID recovery.
→Watch component manufacturing revenue grew 53% YoY, precision engineering by 33% YoY, signaling healthy momentum.
→Ethos retail business targets Rs.1000 Crores turnover with 10% EBITDA in 3-5 years.
→India is at a threshold per capita income (~$2500) where luxury consumption is expected to accelerate.
→Luxury segment anticipated to grow in healthy double digits fueled by rapid wealth growth in high-income segments.
→Expansion plans include luxury categories beyond watches like luggage (Rimowa franchise), and branded jewelry.
→Pre-owned luxury watch business (secondtimezone.com) is also poised for rapid scaling and profitability.
→Working capital and inventory management aligning better with global benchmarks, aiding operational efficiency.
→Overall, the outlook is optimistic with expected robust sales growth driven by reopening, online presence, and new segment entries.

Margin guidance

Category 3

→Ethos aims to achieve an EBITDA margin of about 10-11% in the next two years as operating leverage kicks in and higher margin exclusive brands gain share.
→Ethos' revenue target is ₹1,000 Crores with 10% EBITDA within 3-5 years, with strong double-digit growth expected in luxury consumption driven by rising Indian GDP and wealth.
→The jump in Ethos’ valuation and rights issue reflects positive future growth expectations and strong investor confidence.
→KDDL’s manufacturing businesses, including watch components and precision engineering, are expected to sustain healthy growth post-pandemic with expanding exports and higher value segments like aerospace, defense, and electric vehicles.
→Inventory optimization and improved working capital (7 months inventory, 4-5 months paid inventory) support efficient operations.
→Growth outlook for luxury luggage (Rimowa franchise) and branded jewelry expansion is positive, adding to future revenue streams.
→Pre-owned watch business (secondtimezone.com) holds strong medium-to-long-term scaling potential with robust profitability.

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Fundraise plans

Yes

→KDDL completed a rights issue raising Rs.25 Crores during the current year; Rs.18.75 Crores of this is planned to be invested in its subsidiary Ethos Limited (Page 4).
→Ethos Limited has an ongoing rights issue approved by its board for up to Rs.25.5 Crores through issuance of equity shares at Rs.550 each; KDDL (holding ~77% in Ethos) will participate in this rights issue (Page 4).
→There is no explicit mention of any new debt fundraising during the call.
→The company is closely monitoring capital markets conditions for any potential IPO or demerger of Ethos but no final decision or timeline is shared yet (Page 9).
→Overall focus appears to be on strategic equity infusion via rights issue to strengthen balance sheet and fund inventory, digital capabilities, and business development initiatives (Page 5, 16).

Order book

Yes

→The transcript does not provide explicit current or expected order book or pending orders figures for KDDL Limited.
→However, it mentions a positive demand outlook with customers ramping up their watch manufacturing activities leading to better order inflows.
→The precision engineering business is witnessing a healthy flow of inquiries and RFQs (Request for Quotations) from large accounts, mainly in the export market, indicating a robust order pipeline.
→Despite COVID-19 related slowdowns, especially in aerospace and defense, demand and orders are expected to pick up rapidly in the coming quarters.
→Overall, the company expresses optimism about order inflows and growth in both manufacturing and retail businesses based on improved market conditions.

Capex plans

Yes

- Capex for the current financial year expected to be around Rs. 3-5 Crores, mainly for store fit-outs like the Bovet Boutique starting Q1 next financial year. - Bovet Boutique, a high-end exclusive watch brand store, is under fit-out and slated to open soon. - Plans to open new stores in the luggage segment (Rimowa franchise), starting with one flagship boutique in Mumbai, followed by another in Delhi. - Continued investment in digital capabilities and omni-channel platforms for Ethos. - Rights issue in Ethos (up to Rs. 25.5 Crores) to fund inventory build-up for new stores, digital enhancements, and business development initiatives. - App development for Ethos is underway and expected to launch next year, aiming for a global standard app. Overall, strategic investments focus on retail expansion, enhancing brand experience, and bolstering digital infrastructure.

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