Honasa Consumer share price rallied over 5% in early trade on Monday, extended gains to the second session, after the company reported strong earnings growth for the second quarter of FY27. The stock rallied as much as 5.22% to Rs 494.25 apiece on the BSE.
The parent company of beauty brand Mamaearth, on Friday posted a consolidated net profit of Rs 73 crore in Q2FY27, registering a growth of 87.2% from Rs 39.27 crore in the year-ago period.
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Revenue from operations grew 35.9% to Rs 731.18 crore from Rs 538 crore, YoY. At the operational front, EBITDA during the quarter jumped 93.4% to Rs 93.2 crore from Rs 48.2 crore, while EBITDA margin improved to 12.7% from 9%, YoY.
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Analysts said Honasa's Q2FY27 was a strong quarter, with a beat on all fronts. Growth was broad-based, with focus categories growing more than 40%, Mamaearth sustained its high-teens growth and younger brands grew over 45%
Should you buy, sell or hold Honasa Consumer shares after Q2 results?
Jefferies maintained its ‘Buy' rating on Honasa Consumer shares and raised the target price to Rs 700 after the company reported its strongest performance since listing.
According to Jefferies, EBITDA margin ahead of expectations, while growth was largely volume-led, with price hikes and favourable product mix.
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Mamaearth continued to generate mid-teen EBITDA margins and the company continues to target 15% EBITDA margin by FY30, Jefferies said. It raised earnings estimates by 10-16%.
Citi maintained ‘Sell' call and Honasa Consumer share price target of Rs 390 apiece after another strong quarter, with growth broad-based across brands, categories and channels.
The brokerage firm said that current valuation already discounts sustained growth and margin expansion. It believes intensifying competition leaves limited room for upside.
Emkay Global Financial Servies raised FY27-29 earnings estimates by 5-9% led by higher sales (stronger-than-expected performance of Mamaearth and The Derma Co) and higher margin assumptions (to factor in the past several Quarter beat).
Overall, it expects sales and earnings CAGR of 18% and 27% over FY26-29E. It retained a ‘Buy' call and raised Honasa Consumer share price target by 4.5% to Rs 575.
Motilal Oswal reiterated its ‘Buy' on Honasa Consumer shares with a Sep 2027 target price of Rs 550, based on 5x EV/sales. It sees 25% overall revenue growth for the company in Q2FY27, with ~12% operating profit margin.
“With a broadening addressable market and continued focus on disciplined execution, we expect Honasa to sustain both its growth trajectory and margin expansion over the medium term,” Motilal Oswal said.
At 10:20 AM, Honasa Consumer share price was trading 3.89% higher at Rs 487.95 apiece on the BSE.
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