Honasa Consumer Shares Surge Nearly 17% Even as Profit Slips

Honasa Consumer Ltd. experienced a double-digit rise of nearly 17% on Friday after reporting its Q4 results. The company, known for its beauty and personal care (BPC) brands like mamaearth and Derma Co., reported a revenue of Rs 534 crore for the quarter ending March, marking a 13% rise from Rs 471 crore recorded in the corresponding quarter of the previous fiscal.

However, profit levels took a hit with PAT dropping from Rs 30 crore in the year-ago quarter period to Rs 25 crore in Q4FY25. At 12:00 pm, Honasa shares were trading at Rs 321.15, up by 16.71% on the National Stock Exchange.

Gross profit margin surged by 76 basis points, to 70.7% in the quarter under review, owing to an "improved product mix and operational efficiencies," as per the exchange filing.

"Our newer brands have also maintained a strong trajectory, growing over 30% year-on-year (YoY) in FY25. Notably, The Derma Co. has now crossed Rs 100 crore Annual Recurring Revenue (ARR) from offline channels while continuing to lead across top online platforms," said Varun Alagh, chairman and CEO and co-founder, Honasa Consumer Ltd.

Honasa Consumer Share Price Outlook

So far this year, the company's shares have surged over 28% on the bourses. Over the past six months, the rally has been even sharper, with a gain of more than 40% on the National Stock Exchange.

JM Financials has maintained a 'Buy' rating with a revised discounted cash flow (DCF) of Rs 300. "Honasa's Q4FY25 earnings print was above expectations both on revenue and profitability – revenue growth was 5% ahead of estimates led by better-than-expected performance in core as well as newer brands, which along with higher GM and lower staff costs resulted in better than expected margin delivery," JM Financials said in its report.  

"Current valuations at 3.5x/3.1x FY26/27E sales are not expensive (HUL acquired Minimalist at c.6x sales), rerating hinges on sustained improvement in Mamaearth performance," the brokerage firm said. On an annual basis, the shares of the company have struggled to trade in the green territory, declining over 23% on NSE.