Shares of Honasa Consumer--the parent company behind beauty and personal care brand Mamaearth, surged 9 percent on February 13 following its Q3 results announcement.
The company's net profit remained flat on year at Rs 26 crore while revenue grew 6 percent on-year to Rs 518 crore.
Despite the flattish profit growth, investors were rejoiced to see the company sliding back into profitability in Q3 FY25 after posting a loss of Rs 18.5 crore in the previous quarter, following its transition to a direct-to-consumer (D2C) model under Project 'Neev,' which required inventory adjustments.
Accordingly, the company's gross profit margin improved by 132 basis points to 70 percent, while EBITDA stood at Rs 26 crore, with a 5 percent EBITDA margin for the quarter gone by. Chairman and CEO Varun Alagh emphasised the company’s focus on long-term growth, strengthening offline distribution in the top 50 cities, and driving innovation to enhance consumer value.
At 11.19 am, shares of Honasa Consumer were trading at Rs 220.85 on the NSE. The surge in Honasa Consumer's share price was also driven by a spike in trading volumes. As much as 46 lakh shares of Mamaearth changed hands on the exchanges so far, already nearly six times the one-month daily traded average of eight lakh shares.
Also, the stock has been on a five-day downslide till Tuesday, during which it lost 13 percent of its value. This also means that any negative knee jerk reactions to the company's Q3 earnings, were already factored in the recent fall.
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Despite Honasa’s growth, CEO Varun Alagh has acknowledged that the rise of quick commerce platforms like Blinkit, Swiggy Instamart, Zepto, and BigBasket has intensified competition by making brand discovery and launches easier. In a previous interview with Moneycontrol, he noted that while quick commerce has had a greater impact compared to modern or general trade, its effect is less pronounced when compared to e-commerce giants like Flipkart and Amazon.
Meanwhile, the company also achieved another feat in the first nine months of FY25 as its revenue moved past the Rs 1,500-crore mark for the first time ever. Honasa's revenue reached Rs 1,533 crore in FY25 so far, marking a 5.8 percent on year growth. Adjusted for a one-time inventory correction in Q2, revenue stood at Rs 1,596 crore, reflecting a 10.2 percent on year jump.
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