Emkay Global Assigns Target Price of Rs 2800 to Ethos

Emkay Global Financial Maintains Positive Stance on Ethos Amidst Strong Revenue Growth and Margin Recovery

Emkay Global Financial's latest research report on Ethos reveals a positive outlook for the company, driven by its exceptional revenue growth and gradual margin recovery. Despite a target price cut, the research firm maintains a BUY stance on Ethos, citing the company's best-in-class revenue growth of approximately 29% (14.2% SSG in FY26) and the normalization of currency impact and customs duty under the EFTA agreement. This has led to a significant improvement in the company's balance sheet, with a net cash position of Rs7.6 billion (~85% of current invested capital as of FY26-end).

The company's operating cash flow has also shown an encouraging turnaround, with a positive result in FY26, thanks in part to a 25-day working capital optimization. Additionally, Ethos' CPO vertical has grown by approximately 23% in FY26, while its lifestyle subsidiary, which includes Messika/Rimowa (with a ~75% stake), has opened two new stores and reported a positive PAT in FY26. However, losses from associates and joint ventures, including Favre Leuba (34% stake) and Pasadena (50% stake), stood at Rs46 million in FY26, likely due to their ramp-up phase.

Emkay Global Financial Trims Target Price, Maintains BUY on Ethos

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In its latest report, Emkay Global Financial has trimmed its target price for Ethos by approximately 5% to Rs2,800 from Rs2,950 (26x Mar-28E EBITDA), citing continued currency depreciation and negative operating leverage, which led to a ~4% EBITDA miss and a ~300bps EBITDA margin dip in Q4. Despite this, the research firm maintains a BUY stance on Ethos, driven by its strong revenue growth and margin recovery.

Comparison of Ethos' EBITDA Growth and EBITDA Margin Across Quarters