KDDL Limited , a prominent player in the watch and precision engineering industry, has released its financial results for the fourth quarter, showcasing a mixed performance with revenue growth but a decline in profitability. The company has also announced a dividend recommendation for its shareholders.

Q4 Financial Highlights

KDDL reported a significant increase in its Q4 revenue, which rose to ₹4.20 billion from ₹3.48 billion in the same quarter of the previous year, representing a year-over-year growth of approximately 20.69%. This robust top-line performance indicates strong demand for the company's products and services.

However, the company's bottom line faced some pressure. The consolidated net profit for Q4 decreased to ₹203.10 million, down from ₹255.70 million in the corresponding quarter of the previous year, marking a decline of about 20.57%.

Operational Performance

Despite the challenges in profitability, KDDL managed to improve its operational efficiency to some extent. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to ₹644.40 million from ₹606.00 million in the year-ago period, showing a growth of approximately 6.34%.

However, the EBITDA margin saw a contraction, declining to 15.36% from 17.43% in the previous year's quarter. This suggests that while the company was able to generate higher operational earnings, the pace of cost increases outstripped revenue growth, leading to margin pressure.

Dividend Announcement

In a move that may please shareholders, KDDL's board has recommended a final dividend of ₹5.00 per equity share. This dividend announcement comes despite the dip in profitability, potentially reflecting the management's confidence in the company's financial stability and future prospects.

Conclusion

KDDL's Q4 results present a nuanced picture of the company's performance. While the substantial revenue growth is a positive indicator, the decline in net profit and EBITDA margin suggests that the company faced challenges in maintaining its profitability levels. The dividend recommendation, however, may be seen as a positive signal to investors about the company's financial health and commitment to shareholder returns.

Investors and analysts will likely be watching closely to see how KDDL addresses the profitability challenges while capitalizing on its strong revenue growth in the coming quarters.

KDDL Limited has announced a significant move in the watch industry through its wholly-owned subsidiary, Mahen Distribution Limited. The company has acquired 874,000 partly paid-up equity shares of Silvercity Brands AG, a Swiss watch company, at a price of CHF 2.86 per share, totaling approximately INR 25.00 crore.

Acquisition Details

About Silvercity Brands AG

Silvercity Brands AG is a Switzerland-based watch company incorporated on March 6, 2023. The company's main objectives include:

1. Acquisition, sale, holding, and management of intellectual property rights and license rights in the watch industry and related fields.
2. Purchase, sale, marketing, and development of watches, related products, and other luxury items.
3. Provision of services in the aforementioned areas.

Strategic Implications

This acquisition strengthens KDDL's position in the watch industry, particularly in the luxury segment. After this transaction, KDDL Limited, directly and indirectly (through Mahen Distribution Limited and Ethos Limited), holds a 93.07% equity stake in Silvercity Brands AG.

Financial and Regulatory Aspects

• The transaction was completed at arm's length.
• No governmental or regulatory approvals were required for this acquisition.
• The payment was made through an online banking system.

Company Statement

In its regulatory filing, KDDL Limited stated, "The main purpose of the Company [Silvercity Brands AG] are acquisition and sale as well as the holding and management of Intellectual property rights and license rights, in particular in the watch industry and related fields."

This strategic move by KDDL Limited, through its subsidiary, indicates the company's commitment to expanding its presence in the global watch market and potentially leveraging new intellectual property in the luxury watch segment.