Honasa Consumer reported a 22.5% revenue growth for Q2 FY26. Gross profits reached an all-time high of 71.9%, with EBITDA stable at 8.4% (INR48 crores) and PAT at INR39 crores. The company is focusing on core categories and sees significant potential in oral beauty, projecting a $700 million opportunity by 2030. Mamaearth is showing growth across channels, with a goal of double-digit growth.
Financial Performance Highlights
Honasa Consumer demonstrated strong financial performance in Q2 FY26:
- Revenue growth of 22.5%.
- Gross profits at 71.9%, an all-time high.
- EBITDA at 8.4%, amounting to INR48 crores.
- PAT of INR39 crores.
- Strong UVG at 16.7%.
- Continuing in the negative working capital zone.
The company has shifted its financial reporting due to a change in settlement processes with the Flipkart Group, affecting revenue recognition but not absolute profitability.
Strategic Focus on Core Categories
Honasa Consumer is strategically focusing on a few core categories to drive growth. These categories are growing faster than the company average, with e-commerce and modern trade showing 20%+ growth. General trade also exhibits double-digit secondary sales growth. Core categories now contribute 75% of revenue, with a target to reach 84%-85% in the next 4-6 quarters.
Mamaearth Turnaround and Growth
Mamaearth is experiencing a turnaround, showing growth across channels. The company successfully built another hero SKU in rice face wash, aiming to enter the INR100 crores+ club. There’s confidence that Mamaearth’s growth will improve towards double-digit figures.
Young Brands Portfolio Performance
The young brands portfolio continues to perform well, delivering 20% Y-o-Y growth. Derma Co has achieved a INR750 crores net sales ARR with a high single-digit EBITDA profile and is now the number one sunscreen brand in the country for 2024. The company is now looking to build moisturizer and shampoo as categories to reach the INR1,000 crores+ milestone.
General Trade Distribution
Honasa Consumer has strengthened its general trade distribution, with sequentially growing secondary sales rate growth and a 35% Y-o-Y increase in direct outlet billings. The brand is available in 250,000+ retail outlets. Direct distributor contribution now accounts for 80% of the business.
R&D and Product Superiority
The company continues to develop new technologies and formulations. Innovations include a deep penetration formula in Derma Co and the first in vivo tested sunscreen with anti-pollution factor in Aqualogica.
New Brand Launch: Lumineve
Honasa Consumer launched Lumineve, a brand specifically focused on night care, exclusively with Nykaa. This is the company’s first entry into prestige skincare, priced at approximately 2.5x of current products.
Investment in Oral Beauty
The company invested in Fang, an early-stage oral care brand, taking a significant minority stake. Honasa Consumer sees Fang as a potential prestige leader in the oral care space, projecting it to be a $700 million opportunity by 2030.
Source: BSE
