Buy Honasa Consumer; target of Rs 400: ICICI Securities

ICICI Securities's research report on Honasa Consumer

Honasa started FY26 on steady footing – revenue/ UVG up 7.4%/ 10.5% YoY driven by 20%+ growth in focus categories across brands. Revenue growth was partially impacted by early onset of monsoon (200bps impact on revenue). Modern trade and e-commerce channel grew in double digits, while general trade channel sequential performance continues to improve on management initiatives. Younger brands, now contributing more than 50% of revenue, continue to register 20%+ growth. Overall profitability was stable during the quarter, which is expected to improve with operating scale in younger brands. Going ahead, scaling up of younger brands driven by NPDs and sustained improvement in Mamaearth’s performance on the back of RTM changes, should drive a healthy performance. BUY.

Outlook

Maintain BUY with a DCF-based target price of INR 400 as we roll forward to Sep’27E. At our TP, the stock will trade at 50x Sep’27E EPS. Key risks: 1) heightened competition, 2) execution miss, 3) low success in scale-up of new brands and 3) continued slowdown in Mamaearth.