Shares of Mamaearth’s parent traded higher on Monday as brokerages split on valuation after a quarter of 35.9 per cent revenue growth.
What happened
Shares of Honasa Consumer Ltd traded at ₹478.40 on Monday, a gain of ₹8.35, or 1.78 per cent, over the previous close of ₹470.05, The Hindu BusinessLine reported. The stock opened at ₹485 and touched ₹493.90 before giving back part of that rise as the morning went on.
About 47.55 lakh shares changed hands during the session, and the newspaper said sellers accounted for 70.52 per cent of pending orders. Over the past year the stock has risen nearly 75 per cent. It now trades at a price-to-earnings multiple of 53.67x.
Brokerages read the numbers differently. Jefferies kept its Buy rating, lifted its target price to ₹700 and revised its profit forecasts upward by 10-16 per cent, The Hindu BusinessLine said. Citi stayed with Sell and a ₹390 target, arguing that at 49x FY28 earnings the share price already reflects expectations of continued fast growth and wider margins.
The background
The rally follows a strong second quarter for the homegrown beauty and personal care company. For Q2FY27, Honasa posted consolidated revenue from operations of ₹731 crore, 35.9 per cent higher than a year earlier and the fastest pace it has recorded since listing. Profit after tax climbed 86.7 per cent to ₹73 crore.
Operating earnings grew even faster. EBITDA nearly doubled to ₹93 crore, while margins improved to 12.7 per cent, an expansion of 389 basis points. Underlying volume growth for the quarter stood at 31.3 per cent, according to The Hindu BusinessLine.
Growth came from across the portfolio. Mamaearth, the group’s flagship brand, held its growth in the high teens. The Derma Co and Aqualogica each expanded by more than 45 per cent year-on-year. Secondary sales rose by over 40 per cent in both general trade and modern trade.
What it means for you
For shoppers, the results point to steady demand for Mamaearth, The Derma Co and Aqualogica, with the two younger labels growing fastest. Since secondary sales climbed by over 40 per cent in both general trade and modern trade, these products are moving briskly through traditional retail as well as organised stores — so they should be easy to find in more than one kind of outlet.
For the second half, management expects margins near 12.5 per cent, and it restated its aim of reaching 15 per cent within four years. The reported figures say nothing about product prices, so shoppers may want to compare rates across stores and platforms before buying. Retail investors may want to weigh both the Jefferies and Citi views before acting on the stock’s run-up.
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Sources
- The Hindu BusinessLine — Honasa shares rise nearly 2% as strong Q2 results draw mixed analyst calls
