Honasa Consumer Ltd. posted a surprise loss of Rs 18.6 crore in the July–September quarter of the current financial year, according to an exchange filing on Thursday.
The Mamaearth parent firm had reported a profit of Rs 29.4 crore in the year-ago period. Analysts tracked by Bloomberg had a consensus estimate of a Rs 6-crore profit.
Mamaearth Q2 FY25 Highlights (Consolidated, YoY)
Revenue down 6.9% to Rs 461.8 crore versus Rs 496.1 crore (Bloomberg estimate: Rs 510 crore).
Net loss at Rs 18.6 crore versus profit of Rs 29.4 crore (Estimate: Rs 6 crore).
Ebitda loss at Rs 30.7 crore versus Rs 40.2 crore (Estimate: Rs 3.3 crore).
Management Comments
Over the past few months, Honasa Consumer has been implementing Project Neev to optimise their distribution model, Chief Executive Officer Varun Alagh said.
In this quarter, the company had taken strategic steps towards transitioning from super-stockists to direct distributors in top 50 cities, impacting their revenue and profit, leading to a slowdown for Mamaearth, according to the CEO.
"However, this realignment will also strengthen offline go-to-market strategy in the quarters ahead, setting the stage for our next phase of growth," Alagh said. "For us, strengthening our offline GTM capabilities and bringing Mamaearth back on the strong growth trajectory are our top priorities."
Shares of Honasa Consumer closed 2% higher at Rs 371.55 apiece on the National Stock Exchange, compared to a 0.11% decline in the benchmark Nifty 50. The share price has risen 18.12% in the last 12 months and fell 15.71% on a year-to-date basis.
Ten out of the 12 analysts tracking the company have a 'buy' rating on the stock, one recommends 'hold' and another suggests 'sell', according to Bloomberg data. The average of 12-month analysts' consensus price target implies a potential upside of 42.8%.
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