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ICICI Securities Report
Brokerage firm ICICI Securities has retained its ‘Buy' rating on Honasa Consumer Ltd. with a revised target price of Rs 550, implying an upside potential of around 32% from current levels, citing improving growth visibility and strengthening profitability profile.
Honasa's upcoming Analyst Meet is likely to focus less on near-term recovery and more on the sustainability of growth, profitability and the long-term shape of the business. The brokerage believe key investor expectations would be:
- stronger visibility on the sustainability Mamaearth's return to teen growth, supported by focus category leadership and improving offline execution;
- clearer articulation of Derma Co's long-term profit pool, scalability of younger brands and portfolio diversification benefits; and
- improved disclosure around channel mix, advertising and promotion efficiency, operating leverage and medium-term margin aspirations.
The brokerage also highlighted that investors would also seek greater clarity on capital allocation priorities, particularly after the maiden dividend announcement, and Honasa's roadmap to evolve from a portfolio of digital-first brands into a scaled beauty platform with multiple category leaders.
The brokerage also flagged emerging growth opportunities in segments such as nutraceuticals, oral beauty and men's grooming, which could further strengthen Honasa's positioning as an innovation-led beauty platform over the long term.
However, ICICI Securities cautioned that risks remain, including intensifying competition, execution challenges, and slower-than-expected scaling of new brands, along with any potential moderation in Mamaearth's growth trajectory.
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