Mamaearth share price were locked at 20% upper circuit on Thursday after the company reported its financial results for the quarter ended September 2023, its first quarterly earnings after the company got listed on the bourses. Mamaearth shares rallied 20% to a fresh high of ₹422.50 apiece on the BSE.
Honasa Consumer, the parent company of digital skincare firm Mamaearth, reported a net profit of ₹30 crore in Q2FY24, which doubled from the same period last year. Its revenue from operations grew 21% to ₹496 crore.
Read here: Mamaearth Q2 Results: Honasa Consumers net profit doubles to ₹30 crore in first results post listing, revenue up 21%
The direct-to-consumer (D2C) unicorn’s revenue grew 33% in the first half of FY24 when the median growth of the fast-moving consumer goods (FMCG) industry stood at 9%.
“Honasa has been able to deliver market-beating growth and constantly improve the profitability portfolio of the company. Our business has grown by 33 percent Y-o-Y in H1FY24 which is 3.8 times the median growth of FMCG companies in India,” said Varun Alagh, Chairman and CEO.
Honasa Consumer continues to operate at a negative working capital of minus 5 days in H1FY24. The company’s offline distribution increased 47% YoY to 1,65,937 outlets.
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Honasa Consumer’s Q2 EBITDA grew 53% YoY to ₹40 crore, which was 25% above Jefferies’ estimates, aided by a oneoff reversal of ESOP costs due to scale-down of Momspresso business. Adjusted for this, EBITDA grew 35% YoY, 11% above estimates. The beat was led by better margin expansion, even as revenue was in-line.
EBITDA margin expanded 170 bps YoY to 8.1%, its highest ever.
Foreign brokerage Jefferies said Honasa Consumer reported a strong Q2 on both topline and margin.
“While there was a growth deceleration from 1Q, management attributed this to ERP changeover and hence, 1H growth of >35% reflects the true picture. New brands are scaling up well, with Dr. Sheth now the fourth brand to cross ₹1.5 billion ARR. Mamaearth 1H growth was also in D/D. Management sounded confident on both growth and margins,” Jefferies said.
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It upgraded FY24-26 Ebitda and EPS estimates by 5-6% and values Honasa Consumer at 6x Sep-25 EV/Sales.
Jefferies reiterated ‘Buy’ call on Honasa Consumer and raised the target price to ₹530 per share from ₹520 earlier, implying an upside of 50% from Wednesday’s closing price.
Honasa Consumer shares plunged more than 4% on Wednesday ahead of the announcement of Q2 results. However, the stock recovered on Thursday and made a fresh high.
Shares of Honasa Consumer made a debut at Dalal Street on November 7. The stock saw flat listing at ₹330, a premium of 2% over its issue price of ₹324 apiece on the NSE.
At 2:35 pm, Honasa Consumer shares were still locked at upper circuit limit of 20% at ₹422.50 apiece on the BSE.
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Updated: 23 Nov 2023, 02:37 PM IST
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