Synopsis:
Honasa Consumer shares surged 9% after turning profitable YoY in Q2, driven by strong brand performance and recovery in Mamaearth. Jefferies maintained a “buy” rating with a Rs. 450 target, implying 50% upside potential.
This company provides beauty and personal care products through its digital platform and is now in the focus after its company reported Q2 results with PAT growth from loss to profit YoY and jefferies gave a buy target of 50% upside.
With market capitalization of Rs. 9,650 cr, the shares of Honasa Consumer Ltd are currently trading at Rs. 299.20 per share, increasing 9% in today’s market session making a high of Rs. 308.20, from its previous close of Rs. 282.05 per share.
QoQ performance
On a quarterly basis, revenue from operations fell by 9.5% from Rs. 595 cr to Rs. 538 cr. Total income fell 9% to Rs. 558 cr from Rs. 616 cr. PAT also decreased by 5% from Rs. 41 cr to Rs. 39 cr over the same period.
YoY performance
On a year-on-year basis, Revenue from operations increased by 16.5% from Rs. 462 cr in Q2FY25 to Rs. 538 cr in Q2FY6. Gross profit rose by 19.4% from Rs. 318 cr to Rs. 379 cr. EBITDA went from a loss of Rs. 31 cr to Rs. 48 cr. EBITDA margin stands at 8.9% versus a negative 6.6%. PAT grew from a loss of Rs. 19 cr to a profit of Rs. 39 cr. PAT margin stands at 7.3%. The company reported a ROCE of 7.44% and a ROE of 5.51%. Its stock P/E stands at 136, compared to the industry average P/E of 51.0.
Business Highlights
Underlying Volume Growth (UVG) remained strong at 16.7% in Q2, highlighting the resilience and volume-driven growth of the company’s core business. Mamaearth returned to positive growth, with NielsenIQ data indicating further market share gains in face cleansers (+123 bps), while its shampoo segment remained stable.
The Rice Facewash crossed the Rs. 100 crore ARR mark, joining Ubtan and Vitamin C ranges, underscoring the brand’s strong category depth. Younger brands delivered over 20% YoY growth in Q2, sustaining solid momentum across key focus categories.
Mamaearth has demonstrated a rebound in growth, driven by 20% plus increases in e-commerce during Q2FY26, with modern trade also showing robust double-digit year-on-year offtake growth, while general trade contributed a steady single-digit YoY secondary sales increase for the same period.
Jefferies on Honasa
Jefferies reiterated its “buy” rating on Honasa Consumer, setting a target price of Rs. 450, which is an upside of 50% from the current levels. The brokerage noted that the company is well-positioned for robust growth in the upcoming quarters, with Mamaearth returning to a strong growth path and its offline expansion strategy showing encouraging results.
Honasa Consumer Limited, India’s largest digital-first beauty and personal care company, houses a diverse portfolio of six brands. The company is well-positioned to capitalize on emerging trends in the BPC market through data-led innovation and a robust omnichannel distribution network. Guided by its purpose-driven vision, Honasa remains focused on building a sustainable and consumer-centric future.
Written by Manideep Appana
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
