One listed company holding two things: a watch-component and precision-engineering manufacturer guided to grow 20-25%, and a 50.11% stake in listed Ethos. Strip out the Ethos stake and the question is whether the multiple left on the standalone operating business is reasonable for its growth.
What it is
KDDL makes the visible parts of premium watches: dials, hands, indexes and bracelets. It has supplied Swiss and domestic luxury brands for 40+ years through its Taratec division, and reaches Swiss OEMs through two Swiss subsidiaries, Pylania SA (trading) and Estima AG (manufacturing). It is one of the largest independent dial and hand makers globally. Founded 1981, based in Parwanoo. Y.C. Saboo is Chairman and MD. Promoter holding is about 50%.
Within Taratec, watch components (dials, hands, indexes) did about ₹240 cr in FY26, up 20%. Bracelets, the newest line, added about ₹40 cr.
Around the watch core sit three more businesses:
Eigen is precision metal stamping and tooling for auto, electronics, EV and energy storage, aerospace and defence. FY26 revenue ₹200 cr, up from ₹147 cr in FY25 and ₹95 cr in FY24, growing 35%+. Certified to IATF 16949, ISO 9001 and AS 9100D. Visible customer references include Aisin and Salcomp.
OrnaPack makes luxury packaging boxes for watches and jewellery. FY26 revenue ₹23 cr, up from ₹17 cr (about 35%), still loss-making.
Favre-Leuba is a Swiss watch brand (origin 1737), acquired in 2023 via Silvercity Brands AG (93.08% held) and relaunched in 2024. Present in 20+ countries, 80+ points of sale.
Separately, KDDL owns 50.11% of Ethos, India's largest luxury watch retailer, which is itself listed.
Standalone FY26 numbers for the operating business, before any Ethos value:
Revenue: ₹506 cr, up 31.9% YoY
EBITDA: ₹116.9 cr, margin 23.1%
PAT: ₹76.6 cr, margin 15.1%, up 56% YoY
Why now
The standalone is still under-recognised. KDDL trades at ₹3,899 cr. Its Ethos stake is worth about ₹3,288 cr at market. The market still anchors on KDDL as mostly an Ethos holding company, so the manufacturing business doing ₹76.6 cr of PAT and growing gets limited separate credit. The recent move has closed part of this gap, but not all of it.
Precision engineering is inflecting. Eigen grew 35%+ in FY26 to ₹200 cr, with EV, energy storage and electronics as the fastest-growing end-markets. Management puts its share in precision stamping at under 1%, so the runway is large and the business has no dependence on the Swiss watch cycle.
Multiple capacity expansions are completing. Electroplating expansion completes Q1 FY27, the Bengaluru bracelet plant is ramping, and OrnaPack is scaling. These were funded over FY24-FY26 (₹25 cr bracelet plant, ₹30 cr dials and Eigen tooling, ₹34 cr electroplating and OrnaPack) and now drive operating leverage into FY27-28.
Swiss watch market is stabilising. Watch-component exports fell about 20% YoY in FY25 as China and Hong Kong demand weakened. Early 2026 data points to stabilisation. India is now one of the fastest-growing markets for Swiss brands, partly offsetting the weakness.
Q4 FY26 standalone shows the turn: revenue +42%, EBITDA +88%, PAT +150%.
Triggers
Watch cycle: export components guided stable in H1 FY27, with growth more visible in H2 FY27. Domestic demand robust.
Content per watch: bracelets are a higher-value visible component. Capacity going from ~75k to 110k-120k units, currently ~80% utilised, FY26 revenue ~₹40 cr. They are not covered under Swissness rules, which helps Indian manufacturing.
Eigen scale-up: exports, new customers, deeper wallet share and new products against a sub-1% market share base.
Electroplating expansion live Q1 FY27, unlocking larger and more complex orders for both dials and Eigen parts.
OrnaPack breakeven guided H2 FY27, moving it from a drag to a contributor.
Favre-Leuba sales guided to more than double in FY27; stores reported short of stock while production ramps.
Risks
Execution. Capacity is being added across bracelets, Eigen and OrnaPack at once. The thesis needs customer wins, utilisation and margins to scale together, not just plants to come up.
Watch cycle. Continued weakness in China or Europe, or inventory correction, can delay the export recovery.
Margin pressure. Newer bracelet customers at lower price points can moderate near-term margins.
Customer concentration. Sticky 30-year relationships cut both ways; dependence on a few customers adds volatility.
Holdco discount. If the market keeps applying a steep discount to the Ethos stake, the standalone value stays buried.
Currency and cost. A firm Swiss Franc helps exports, but wage inflation and overseas spends can offset it.
What's in the price
This is a sum-of-parts. Work backwards from the market cap to see what the operating business is being valued at.
KDDL market cap: ₹3,899 cr
Ethos stake at market: 50.11% of ₹6,562 cr = ₹3,288 cr
Two anchor cases:
Ethos at full value. Standalone is left at ₹611 cr, about 8x FY26 PAT of ₹76.6 cr. Cheap, but it assumes zero holding-company discount, which never holds for a holdco.
Ethos at a 50% discount. Stake worth ₹1,644 cr, leaving ₹2,255 cr for the standalone, about 29x. Full.
The honest read sits between these. Flip it around: pay a fair 24x for the standalone (the middle of a 20-28x range for a 20-25% grower), and that values the operating business at ₹1,838 cr, which leaves ₹2,061 cr for the Ethos stake. Against a gross stake of ₹3,288 cr, that is a 37% holdco discount. A 30-40% discount on a listed subsidiary stake is normal, not stretched.
So at ₹3,170 the price roughly embeds a 24x standalone plus a high-30s% Ethos discount, or equivalently a 29x standalone plus a 50% discount. Neither is a screaming anomaly. The standalone is no longer being given away the way it was at lower prices. From here the return comes from the operating business actually compounding at the guided rate and the holdco discount not widening, rather than from a large discount simply closing.
What would change my view
Standalone PAT growth stalling, or the EBITDA margin band breaking below ~23% on an underlying basis.
Eigen growth decelerating sharply off the ₹200 cr base, which would remove the non-watch engine.
Export recovery failing to show up in H2 FY27 as guided.
Capex not converting into utilisation and operating leverage over FY27-28.
Cash conversion deteriorating or receivables building as revenue scales.
The Ethos stake derating or the holdco discount widening further.
TenetFour Research. Educational analysis only. Not investment advice and not a recommendation to buy, sell, or hold any security. Author may hold a position in companies discussed. Readers are responsible for their own decisions.