Mamaearth shares rise up to 9% as brokerages upbeat post-Q2 results; Jefferies sees 'glimpse of turnaround'

Honasa Consumer, Data Patterns shares rise.

Honasa Consumer shares climbed as much as 9 percent on Thursday after the company reported a return to profit in the September quarter.

The stock opened with a gain of 6.36 percent and touched an intraday high of Rs 308.20 apiece on the NSE, up 9.2 percent. It later pared some gains to trade at around Rs 295 per share by 10.15 am.

The company, which owns FMCG brands such as Mamaearth and The Derma Co, posted a consolidated net profit of Rs 39.22 crore for the July-September period. It had reported a loss of Rs 18.57 crore in the same quarter last year, according to a regulatory filing.

Revenue from operations rose 16.5 percent to Rs 538.06 crore in the quarter under review, compared to Rs 461.82 crore in the year-ago period. Total income, including other income, stood at Rs 558.20 crore, up 15.84 percent. Total expenses were marginally lower at Rs 505.45 crore.

"Our focus categories continued to contribute over 75 percent of total revenues, reaffirming the success of our category-first strategy. Deeper distribution and brand-building efforts have enhanced consumer engagement across India," Chairman and CEO & Co-founder Varun Alagh said.

In its earnings statement, the company said, "UVG in Q2 remains strong at 16.7 percent, showcasing the resilience and volume-led growth of the core business."

Brokerages gave mixed views on the stock. Jefferies maintained a ‘Buy’ rating with a target price of Rs 450, noting that “business momentum is strengthening with a 17 percent volume-led growth and notable margin improvement.”

HSBC retained a ‘Reduce’ rating with a target price of Rs 264, saying that “Mamaearth’s growth turned positive and emerging brands continued to grow at 20 percent year-on-year. Revenue growth is similar after adjusting for reporting changes, while higher margins led to minor upward revisions in profit estimates.”

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