Mamaearth’s Parent Company, Honasa Reports a 94% Surge in Net Profit

Honasa Consumer Limited, the parent company of the digital skincare brand Mamaearth, announced its financial results for the September quarter of the fiscal year 2024, revealing a net profit of Rs 29 crore. This marks the first time the company has announced its quarterly earnings since its listing on the Indian market.

Mamaearth has solidified its position among the prestigious top 15 brands within the Beauty and Personal Care (BPC) sector, rising to the 13th position in terms of retail spending in CY22, surpassing established legacy brands in the industry.

Impressive Profit Growth 

Concentrating on the company’s top line, in Q2 FY24, its operational revenue surged by 21% Year-over-Year (YoY) from Rs 410 crore to Rs 496 crore. The gross profit climbed to Rs 345 crore, marking a substantial 22% YoY increase from Rs 283 crore in the same quarter last year. The company’s operating profit during this quarter reported a remarkable growth of 53% YoY, reaching Rs 40 crore compared to the previous Rs 26 crore. The operating profit margin improved from 6.4% to 8.1%.

Shifting focus to the bottom line, the company’s net profit soared to Rs 29 crore, experiencing a robust 94% YoY increase from Rs 15 crore in the corresponding period last year.

CEO’s Comment 

Honasa has been able to deliver market-beating growth and consistently improve the company’s profitability portfolio. Our business has grown by 33% Year-on-Year in H1 FY24, which is 3.8 times the median growth of FMCG companies in India,” said Varun Alagh, Chairman and CEO.

Our profits grew much faster than our revenues, with H1 profit after tax growing by 1,377% to Rs 54 crore. Dr Sheth’s has become the 4th brand from the Honasa portfolio to enter the Rs 150 crore Club, following Aqualogica and Derma Co. We will continue to deliver on our commitments to our business, consumers, and investors,” he added.

Share performance 

The Honasa Share debuted on November 7, 2023, opening flat at Rs 324 per share on the BSE, matching the final issue price. By the end of the listing day, it closed at Rs 337.15 per share. Subsequently, the shares hit a low of Rs 256 on November 10, but then rebounded and closed above the listing price on November 20, settling at Rs 350.45 per share. On November 22, the stock concluded the day in decline, dropping over 4% to Rs 352.10 per share.

After the announcement of quarterly earnings, the company’s stock opened the day with a positive gain of approximately 8% at Rs 380.10 compared to the previous day’s closing price. As of the current moment, it is trading at Rs 382.62 per share on the BSE.

The current market capitalisation of the company stands at Rs 12,310 crore, with the stock having generated an impressive return of 17% over its final issue price.

Company Overview 

Honasa Consumer Limited (HCL) operates a digital platform offering beauty and personal care products. It was incorporated in 2016. Established on the principles of Honesty, Natural ingredients, and Safe care, Honasa Consumer currently caters to more than 500 cities across India. The company has internally developed several consumer brands, such as Mamaearth, The Derma Co., Aqualogica, Dr. Sheth’s, and Ayuga. Additionally, it recently acquired stakes in BBLUNT and the content platform Momspresso. Backed by support from Sequoia Capital India, Sofina SA, Fireside Ventures, and Stellaris Venture Partners, it is positioned to reach a valuation of USD 1 billion.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.