The brokerage sees 25% overall revenue growth for the company in Q2 FY27, with ~12% operating profit margin. With a broadening addressable market and continued focus on disciplined execution, HDFC Securities expect Honasa to sustain both its growth trajectory and margin expansion over the medium term.
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HDFC Securities Institutional Equities
HDFC Securities has reiterated its Buy rating on Honasa Consumer Ltd. with a Sep‑27 target price of Rs 550, based on 5x EV/sales (vs 5.25x earlier, reflecting sector-wide de‑rating; valuation implies ~40x EV/EBITDA and ~49x P/E).
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The brokerage's channel checks with distributors across key markets highlight that offline execution remains central to the next phase of growth. The offline channel accounts for ~35% of the business, while its contribution for Mamaearth is higher at 50%+.
Management is targeting 3x expansion in direct reach over three years, with current efforts focused on boosting throughput at existing outlets. Emphasis has shifted to tightening the primary–secondary growth parity and maintaining distributor inventory discipline at ~30 days.
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Although certain hygiene issues remain, they are being progressively resolved through stronger trade inputs, more competitive schemes, and greater parity with online-led offerings.
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