Shares of Mamaearth parent--Honasa Consumer skyrocketed as much as 9 percent on December 4, after stock exchange filings showed that co-founder and CEO, Varun Alagh, bought additional shares worth Rs 4.5 crore in the company. With this, Alagh's stake in the beauty and personal care firm rose to 31.93 percent from the earlier 31.88 percent.
At 09.52 am, shares of Honasa Consumer were trading at Rs 281.85 on the NSE.
Alagh, who co-founded Honasa Consumer with his wife Ghazal Alagh, now together hold a 35 percent in the company, a rather rare sight in India's startup scene where founders typically hold lower stakes for fundraising.
Alagh's recent stake buy comes at a time when the company faces a major overhaul and has gone through a significant correction in its stock value. Year-to-date, Honasa's shares have fallen more than 38 percent.
Recently, the stock also came under pressure after it reported its first quarterly loss in five quarters for Q2 FY25. In the September quarter, the company recorded a loss of Rs 19 crore compared to a Rs 29 crore profit in the same period last year. Additionally, revenue also dropped 7 percent year-on-year, from Rs 496 crore to Rs 462 crore.
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The stock has gained over 25 percent in the past week, recovering from a sharp correction following its earnings setback. However, the sustainability of this rebound remains uncertain as concerns over a growth slowdown continue to affect the consumption sector.
In a recent note, Emkay Institutional Equities downgraded the stock to 'sell' after the release of its the earnings report, citing a stressed medium-term outlook. "We have conservatively revised our earnings expectations down by 35 percent for FY25-27, cutting topline forecasts by 9-16 percent and lowering margin expectations due to reduced operating leverage benefits," Emkay stated.
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