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ICICI Securities Report
ICICI Securities has reiterated its Buy on Honasa Consumer Ltd. with a DCF-based revised target price of Rs 720 from Rs 600, implying a potential upside of 50% from the current market price of Rs 479.
The brokerage said Honasa's strong June-quarter performance helped address concerns around the revival of Mamaearth's growth and the company's ability to build sizeable brands beyond its flagship label.
Honasa's Q1 FY27 was a strong quarter and helps address two investor concerns: whether Mamaearth can return to steady growth, and whether Honasa can scale brands beyond ME. Like-for-like revenue grew ~32% YoY, while reported revenue grew 27% YoY.
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Volume growth was 30.5% YoY. Ebitda rose ~2.5x YoY to Rs 110 crore, with margin at 14.1%. Mamaearth grew in high teens, focus categories grew 35%+, younger brands grew 40%+ and The Derma Co. crossed Rs 1,000 crore ARR.
The quarter supports the case that Honasa's ‘House of Brands' strategy is gaining scale, though execution in category expansion, offline distribution, and quick commerce remains a key monitorable.
The company remains on track to achieve its FY31 revenue and margin guidance.
Honasa remains the brokerage preferred pick in the consumer space.
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