Ethos Limited

Yashovardhan Saboo

CHAIRMAN AND MANAGING DIRECTOR, ETHOS LIMITED

Pranav Saboo

CEO, ETHOS LIMITED

Ritesh Agrawal

CFO, ETHOS LIMITED

rs,

the very good start that we have had to the year. I am glad to share that after more than two years, the company has witnessed a normal working quarter, free of lockdowns and COVID wave spikes. If thi

94%

pler view of the accounts. I am giving the figures of, Q1FY23 over Q1FY22. Billings increased by 94% year-on-year to INR 201 crore. 26% of the billings in this quarter were contributed from exclusive

INR 201 crore

counts. I am giving the figures of, Q1FY23 over Q1FY22. Billings increased by 94% year-on-year to INR 201 crore. 26% of the billings in this quarter were contributed from exclusive brand watches. Consolidated r

26%

ving the figures of, Q1FY23 over Q1FY22. Billings increased by 94% year-on-year to INR 201 crore. 26% of the billings in this quarter were contributed from exclusive brand watches. Consolidated revenu

95%

r were contributed from exclusive brand watches. Consolidated revenue from operations increased by 95% y-o-y to INR 174 crore. Consolidated gross profit, more than doubled to INR 54.7 crore and the gro

INR 174 crore

buted from exclusive brand watches. Consolidated revenue from operations increased by 95% y-o-y to INR 174 crore. Consolidated gross profit, more than doubled to INR 54.7 crore and the gross profit margin extend

INR 54.7 crore

perations increased by 95% y-o-y to INR 174 crore. Consolidated gross profit, more than doubled to INR 54.7 crore and the gross profit margin extended by 300 basis points to 31.5%. Consolidated EBITDA increased

300 basis point

olidated gross profit, more than doubled to INR 54.7 crore and the gross profit margin extended by 300 basis points to 31.5%. Consolidated EBITDA increased by more than 7 times to INR 21.5 crore and consolidated

31.5%

, more than doubled to INR 54.7 crore and the gross profit margin extended by 300 basis points to 31.5%. Consolidated EBITDA increased by more than 7 times to INR 21.5 crore and consolidated EBITDA ma

INR 21.5 crore

gin extended by 300 basis points to 31.5%. Consolidated EBITDA increased by more than 7 times to INR 21.5 crore and consolidated EBITDA margins expanded by 890 basis points to 12.2%. Consolidated PBT increased

890 basis point

BITDA increased by more than 7 times to INR 21.5 crore and consolidated EBITDA margins expanded by 890 basis points to 12.2%. Consolidated PBT increased multifold to INR 19.5 crore. Stock carrying months on sales

12.2%

ore than 7 times to INR 21.5 crore and consolidated EBITDA margins expanded by 890 basis points to 12.2%. Consolidated PBT increased multifold to INR 19.5 crore. Stock carrying months on sales stood at

“Therefore I am sure you will share my optimism that the remainder of FY23 will be very good too given the very good start that we have had to the year.”

“And these will be utilized for the growth of the company as envisaged in the IPO in these stages.”

“Therefore, we continue to maintain our view and estimate given earlier in the year that the revenue growth in FY23, over FY22 will be as much as 30% to 35%.”

“We hope to exceed INR 75 crore of business by the end of the year through one lounge in Delhi and our website, secondmovement.com.”

“Over the next two years, we will expand the footprint along with the website to three to four major cities in India to continue driving strong growth.”

“Going forward, our focus will continue on adding larger flagship stores complemented by enhanced digital capabilities.”

“The pricing of the watches is determined by the brands and typically if prices are revised and the brands give the guidance at the MRP, the new MRP is valid for the new product.”

“However, I do want to say that for most brands, India is rapidly becoming a high priority market, and certainly we understand that and the brands understand that India will be one of the most important markets in the future,.so, it certainly also stands pretty much high in the order of importance when it comes to allocation.”

“I have really no doubt that Rimova itself will be a highly scalable business.”

“We are starting with one boutique, but I am sure there will be others to follow because we have a large Indian market to cater to.”

Yashovardhan Saboo

28

Ritesh Agrawal

6

Devanshu Bansal

6

Moderator

4

Shyam Garg

3

Rahul Agarwal

3

Vinayak Mohta

3

Saurabh Grover

2

Shubham Agrawal

2

Pranav Saboo

1

Yashovardhan Saboo

Thank you very much, and good afternoon everyone. Thank you for joining us on the Ethos quarter one FY ’23 earnings call. I am joined by Mr. Pranav Saboo, the CEO; and Mr. Ritesh Agrawal, the CFO. And we also have SGA our investor relations advisors on this call. The presentation has been issued to the stock exchanges and also uploaded on our company's website. So I hope everyone has had the opportunity to review it. First and foremost, I am pleased to share that we have reported one of our best quarters for the company recording its highest ever quarterly EBITDA and PAT. I am sure you will also note that it is the result of Q1, which in our industry is considered one of the two leanest quarters without any major festive period and also not the wedding season. Q1FY23 results have fared slightly better even than our best ever festive quarter Q3 in FY22 on profitability metrics. Therefore I am sure you will share my optimism that the remainder of FY23 will be very good too given the very

Pranav Saboo

Pleasing as these record numbers are, we are even more excited about the core aspects for the current year and the years ahead. As is known, quarter 2 and quarter 4 are generally stronger than quarter one and quarter 3 is significantly the strongest of all quarters. Therefore, we continue to maintain our view and estimate given earlier in the year that the revenue growth in FY23, over FY22 will be as much as 30% to 35%. Our company's longstanding relationships with leading luxury watch brands will continue to underline and assist our company's ambitious growth plans and presence in India. We also believe these longstanding relationships with the luxury watch brands enhance our competitive positions. In addition, we will also leverage our in-depth knowledge of luxury watches to expand the market for watches and establish a leading presence even in the segment of Certified Pre-owned Watches. Before concluding my part of the speech, I would like to say that our focus going ahead will cont

Shyam Garg

Sir, my second question was with respect to inventory gains. So are there any probability that we'll have inventory gains for watches?

Yashovardhan Saboo

Okay. Let me answer the question. So, in the last quarter, about 26% of our revenue came from the exclusive brands. Your second question regarding inventory gains, this really depends on how the pricing moves. The pricing of the watches is determined by the brands and typically if prices are revised and the brands give the guidance at the MRP, the new MRP is valid for the new product. Then to that extent, it would be some inventory gain encapsulated in the inventory. It really depends on how the brands determine the policy for their particular brand, the pricing policy. And sorry, your third question was about how luxury brands allocate the products. So I think different brands have different policies and you mentioned shortages of watches in certain brands all over India. This is true, but the shortage is not only all over India, the shortage almost globally, whether you visit some of these brands, boutiques, whether it's in a Dubai or Singapore or London or Paris, there are shortages

Prerna Choudhary

The next question is from the line of Prerna Choudhary from Ace Capital. Please go ahead. Hello everyone, first of all, I would like to congratulate you for such an amazing quarter, and my first question being, can you give some insights on a new jewelry and luggage retailing business. How it has been doing and what is the scalability potential? And the second one being, what is the total working capital cycle in our days for our company.

Yashovardhan Saboo

Okay. Prerna, thank you very much for you for your nice comments. The second question, I am going to transfer that to our CFO and CEO, to answer. The first question regarding the new jewelry and luggage business, let me answer it for you. We have signed on Rimova for the luggage, and Rimova, as you know is LVMH Group company. It is the best known, the most famous luggage brand in the world today and jewelry we have signed on with Messika Paris. I will urge you to check out Messika Paris and how well known it has become, especially among the younger generations. It actually, was chosen by many many stars at the Cannes Film Festival in 2022. Now both these brands we have signed on, but we are still waiting for stores to become available. Rimova, we’re going to start at the Jio World Plaza mall in Mumbai, which is expected to become operational in February 2023. And Messika, we will start in the third quarter of this year. So the businesses, we are in the planning phase, we are, but they