Are Ethos Ltd latest results good or bad?

Ethos Ltd's latest financial results for the quarter ending December 2025 present a mixed picture. The company reported net sales of ₹468.52 crores, reflecting a sequential growth of 22.20% compared to the previous quarter, and a year-on-year revenue growth of 26.65%. This robust topline performance indicates Ethos's successful expansion in the luxury watch market, driven by festive season demand and strategic store openings. However, the profitability metrics reveal challenges. The consolidated net profit for the quarter was ₹30.43 crores, which represents a modest year-on-year growth of 3.19%. This profit growth lags significantly behind the revenue increase, highlighting operational leverage issues. Operating margins contracted to 13.11%, down from 15.42% a year earlier, indicating pressure on profitability despite strong sales. Additionally, the profit after tax (PAT) margin also saw a decline to 6.52% from 7.97% in the same quarter last year. The financial performance indicates that while Ethos is effectively driving sales growth, it faces headwinds in maintaining profitability due to rising operating expenses and interest costs, which reached a record high of ₹7.59 crores. The reliance on other income, which constituted a significant portion of profit before tax, raises concerns about the sustainability of earnings derived from core operations. Overall, Ethos Ltd's results reflect a strong revenue trajectory amidst operational challenges that are affecting profitability. The company saw an adjustment in its evaluation, reflecting these mixed operational trends. Investors should monitor the company's ability to convert sales growth into sustainable profit while addressing the margin compression and capital efficiency concerns highlighted in the latest results.