KDDL - KDDL Ltd

📊 NSE: KDDL 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 8:52

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 24% to INR 1,391.0 Cr in FY2024 from INR 1,119.5 Cr in FY2023. The manufacturing division witnessed ~12% growth in FY2024. Standalone income for Q2 FY2026 grew 30% YoY to INR 126.8 Cr, while H1 FY2026 revenue reached INR 241.6 Cr, up 32.5% YoY.

Geographic Revenue Split

Exports contribute 66% of KDDL's revenue, primarily driven by the watch components segment supplying to global Swiss watch manufacturers. Domestic revenue is largely driven by the Ethos retail network across 26 Indian cities.

Profitability Margins

Consolidated Net Profit Margin improved to 9.9% in FY2024 from 6.9% in FY2023. However, in FY2025, consolidated Net Profit Margin moderated to 8.6% due to demand headwinds in the Swiss watch segment and initial costs for new store launches.

EBITDA Margin

Consolidated Operating Margin (EBITDA) rose to 17.8% in FY2024 from 15.0% in FY2023. In FY2025, the margin moderated to 15.8%. Standalone EBITDA for Q2 FY2026 stood at INR 28.9 Cr, representing an 11% YoY growth.

Capital Expenditure

Gross fixed assets increased to INR 322.3 Cr in FY2025 from INR 276.4 Cr in FY2024. Tangible fixed assets rose by 16.9% to INR 266.0 Cr. A major shift occurred as capital work in progress decreased from INR 34.33 Cr to INR 12.32 Cr following the capitalization of the new bracelet manufacturing unit.

Credit Rating & Borrowing

The average cost of debt decreased to 9.56% in FY2025 from 10.93% in FY2024. Interest cost as a percentage of Gross Operating Revenue was reduced from 1.6% to 0.7% due to higher operational profitability and strategic use of cost-effective export financing.

⚙️ Operational Drivers

Raw Materials

Not specifically disclosed by name in the provided documents, but the business requires high-precision materials for watch components and precision engineering stampings.

Capacity Expansion

The company recently capitalized a new bracelet manufacturing unit. The retail subsidiary, Ethos, expanded its footprint to 73 stores across 26 cities in FY2025 to capture growing luxury demand.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but manufacturing margins are noted to be susceptible to global demand volatility and high-value unit mix changes.

Manufacturing Efficiency

Manufacturing efficiency is driven by a mix of high and low-value units. The company is diversifying into precision engineering (stampings) to improve capacity utilization across non-watch segments.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Growth will be achieved through a three-pronged strategy: expanding the watch component product line (including the new bracelet unit), scaling the Precision Engineering (Eigen) business into new geographies, and aggressive retail expansion of Ethos Limited through new brand partnerships and omnichannel capabilities.

Products & Services

Watch components (hands, dials, bracelets), precision engineering stampings, luxury watches sold through retail, and Favre-Leuba branded watches.

Brand Portfolio

Ethos, Favre-Leuba, Eigen, Mahen Distribution.

New Products/Services

New product lines in watch components and expansion of the luxury and high-luxury portfolio through 73 retail stores.

Market Expansion

Expansion of the precision engineering segment into new global markets and increasing the domestic retail footprint to more cities beyond the current 26.

Market Share & Ranking

Not disclosed as a specific percentage, but described as having a healthy market position in the luxury retail segment.

Strategic Alliances

Strategic brand partnerships for luxury watch distribution through Ethos Limited.

🌍 External Factors

Industry Trends

The luxury watch industry is seeing a shift toward omnichannel retail and premiumization. While the overall demand for watches has faced headwinds, the high-luxury segment remains a focus for long-term growth.

Competitive Landscape

Competes with global component manufacturers and other luxury watch retailers in the fragmented Indian market.

Competitive Moat

Durable advantages include established relationships with Swiss watchmakers, a dominant luxury retail network (Ethos) with 73 stores, and specialized precision engineering capabilities that are difficult to replicate.

Macro Economic Sensitivity

Highly sensitive to global luxury consumer spending and GDP fluctuations, which dictate the demand for Swiss watches and high-end retail.

Consumer Behavior

Shifting toward luxury and high-luxury portfolios, requiring KDDL to maintain high inventory levels and premium store experiences.

Geopolitical Risks

Vulnerable to trade barriers and economic volatility in key consuming regions for Swiss watches, such as Europe and Asia.

⚖️ Regulatory & Governance

Industry Regulations

Complies with SEBI Listing Regulations and maintains Standard Operating Procedures (SOPs) for internal controls. The company also enforces strict prohibitions against child labor in its workforce and vendor chain.

Environmental Compliance

The company implements industry standards in infrastructure design and maintains safety protocols across all operations to mitigate environmental and disaster-related risks.

Taxation Policy Impact

Not disclosed as a specific percentage.

⚠️ Risk Analysis

Key Uncertainties

Demand headwinds in the watch components segment are expected to persist for 1-2 quarters, potentially impacting short-term manufacturing revenue by over 10%.