Comments
Target: ₹1,400
CMP: ₹898.25
Based on monthly data released by the ‘Federation of the Swiss Watch Industry’, Swiss watch exports to India in Oct-22 clocked at 3Y CAGR of over 20 per cent in USD terms. October exports saw an acceleration from the 7-15 per cent CAGR in recent months.
For 7MFY23, Swiss exports logged a 3Y CAGR of 12 per cent (USD), and INR depreciated at about 3 per cent CAGR 3vs. the USD, suggesting about 15 per cent CAGR in INR terms (Emkay Estimate) vs. our FY20-25 estimates of 13.4 per cent CAGR for the Indian luxury watch industry.
The industry continues to see a healthy trend, despite the about 90 per cent recovery in average monthly international travelers, indicating higher purchases in India. In our view, strong growth trends are a result of growth in the number of HNIs, improving price parity vs. global destinations, and relatively-better assortment in India vs. the past.
Ethos’ commentary remains encouraging on margin gains and reduction in working capital (WC) by about 20 days over the next few years. However, we remain conservative due to aggressive store-expansion plans. Slower store additions due to sluggish mall development remains a downside risk while sooner-than-expected entry of ultra-high-luxury brands and faster share gains are potential upsides.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.