Honasa Consumer Q2 Results: Profit Nearly Doubles To Rs 29 Crore, Revenue Up 21% - BQ Prime

Honasa Consumer Ltd.'s profit nearly doubled in its first quarterly results after listing on the bourses.

Consolidated net profit of the parent firm of Mamaearth and The Derma Co. rose 93.4% to Rs 29.4 crore in the quarter ended September, according to its exchange filing.

Honasa Consumer Q2 Highlights (Consolidated, YoY)

• Revenue rose 20.9% to Rs 496.1 crore.

• Ebitda grew 53.4% to Rs 40.2 crore.

• Margin at 8.1% versus 6.4%.

• Volume increased 27%.

• Ad costs rose 22% to Rs 174 crore.

In the first half of fiscal 2024, Honasa Consumer delivered revenue of Rs 961 crore, up 33% over the previous year.

According to Varun Alagh, the company's chairman and chief executive officer, this is 3.8 times the median growth of FMCG companies in the country. "The beauty market in India is brimming with opportunities, and we are receiving a lot of consumer love for our on-trend innovations across brands," Alagh said.

Mamaearth, the largest brand under Honasa, has entered India's top 15 beauty and personal care brands, overtaking many legacy brands, according to a report by Jefferies.

Honasa Consumer has a positive growth priority at a time when fast-moving consumer goods incumbents are trying to tilt towards profitability over growth, the brokerage said. It expects the company to deliver sector-leading revenue growth over the coming years.

Dr Sheth's has become the fourth brand from the Honasa portfolio to enter the Rs 150-crore club after Aqualogica and The Derma Co., the company said.

The Derma Co., the second brand from the Honasa Consumer portfolio, has achieved an annual recurring revenue of Rs 380 crore; and Aqualogica, the third brand, has become the fastest to achieve an ARR of Rs 180 crore.

The acquired brands Dr Sheth's and Bblunt also have grown 30 times and three times, respectively, since the acquisitions, according to the company's disclosure.

Honasa Consumer continued to operate at a negative working capital of minus five days at the end of September.

The D2C unicorn has also increased its offline distribution to 1,65,937 outlets as of September, which is a growth of 47% over the previous year.

With a focus on increasing distribution across general and modern trade chains and exclusive brand outlets, the company intends to compete with the likes of Hindustan Unilever Ltd., Marico Ltd., and Procter & Gamble, among others.

Of the Rs 182 crore of IPO proceeds that Mamaearth intends to spend on ads over the next four years, the lion’s share of Rs 150 crore is expected to be for television campaigns, according to its red herring prospectus.

Shares of Honasa Consumer closed at Rs 352 apiece on the BSE, down 4% from the previous close, and as compared with a 0.14% gain in the benchmark BSE Sensex. The stock surged 13% in the last five days.

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Honasa Consumer Q2 Results: Profit Nearly Doubles To Rs 29 Crore, Revenue Up 21% - BQ Prime
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