Honasa Consumer Ltd (Mamaearth) shares will be under scrutiny on Thursday morning after the largest digital-first beauty and personal care brand reported a 94% year-on-year increase in profit to Rs 29 crore in the September quarter. Honasa Consumer said that sales for the quarter was up 21% year on year at Rs 496 crore, with like-for-like growth of continuing business at 24%. Volumes increased by 27 percent year on year, according to Honasa Consumer in a BSE filing.
Ebitda for the quarter was up 53% year on year at Rs 40 crore, according to Mamaearth. The newly-listed firm stated that it boosted its offline distribution to 1,65,937 stores, a 47 percent increase year on year, and that Mamaearth has joined the top 15 BPC brands in India, surpassing numerous traditional brands.
Chairman and CEO Varun Alagh stated that the Indian beauty business was ripe with prospects and that his brand was gaining consumer attention.
"Honasa has been able to deliver market-beating growth while continuously improving the company's profitability portfolio." In H1 FY24, our business grew by 33% year on year, which is 3.8 times the median growth rate of FMCG companies in India. According to a Jefferies analysis, our largest brand, Mamaearth, has joined the Top 15 BPC brands in India, surpassing numerous historical brands. Our earnings increased far faster than our revenues, with H1 PAT increasing by 1,377% to Rs 54 crore. Dr Sheths is the fourth brand in Honasa's portfolio to enter the Rs 150 crore club, following Aqualogica and Derma Co," he said. Honasa Consumer, according to Alagh, will continue to meet its responsibilities to businesses, customers, and investors.
Honasa Consumer stock began trading on November 7. The stock was up 8.67% over its IPO price of Rs 324 at Wednesday's closing price of Rs 352.10. Jefferies has begun coverage on this stock with a strong Buy call and a Rs 520 target. Honasa Consumer is expected to increase at a compound annual rate of 27 percent between FY23 and FY26, with improved margins, according to the international brokerage. Honasa Consumer, it said, has a large moat as a scaled-up internet-first franchise, and that while the web remains at the center, Honasa currently gets a third of its revenue from offline.
"While Honasa Consumer remains the market leader in digital BPC, the company has also built a strong offline distribution." According to NielsenIQ, Honasa Consumer brands were sold in 1,65,937 retail shops in September 2023, representing a 47 percent growth in offline distribution year over year. "With a focus on increasing distribution across general and modern trade chains, as well as exclusive brand outlets," the company stated in a BSE filing on Wednesday.
