Shares of Honasa Consumer, the parent entity of beauty and personal care brand Mamaearth, rallied 20% on Thursday, hitting its upper circuit limit, following a strong uptick in Q2 sales and a near-doubling of its profit.
Honasa shares hit an all-time high of `423.75 on Thursday, rising 28% since its recent public listing. The company reported a 93% year-on-year jump in its net profit to `29 crore in July-September, while revenue from operations grew 21% to `496 crore.
Though the company’s IPO performance was a dampener, debuting at only a 2% premium, its Q2 earnings showed strong volume growth year-on-year and a larger offline distribution network, pleasing analysts and investors alike.
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“Honasa Consumer has been a notable outlier among digital-first BPC brands in India, from the standpoint of scale, profitability and capital efficiency. We expect it to deliver a sector-leading revenue growth over the coming years, coupled with improving profitability,” Jefferies said in a note.
Encouraged by the strong growth, the brokerage hiked its estimates for Ebitda and earnings per share for the next two financial years by 5-6%. It now expects the FY24 Ebitda to be `131.6 crore on a revenue of `1,963.4 crore. Earnings are expected at `2.99 per share.
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Honasa currently has six brands under its portfolio, including Mamaearth, The Derma Co, Aqualogica, Dr Sheth’s and Bblunt.
While the company does not disclose revenue growth in all its brands separately, it noted that the Mamaearth brand grew by double digits in the first half of this year.
“Among new brands, The Derma Co is now at an annual revenue run-rate (ARR) of `380 crore and Aqualogica is at `180 crore. Dr Sheth became the fourth brand to cross `150-crore ARR, growing 30x since acquisition,” the brokerage said.
