Honasa Consumer, the company behind popular beauty and personal care brands like Mamaearth, The Derma Co., and Aqualogica, has reported impressive financial results for the April-June 2024 quarter.
Specialising in skincare, haircare, and personal wellness products, Honasa Consumer is known for its innovative and rapidly growing portfolio. Let’s delve into how the company has performed and what this means for its future.
Honasa consumer’s net profit soars 63% year-on-year
Honasa Consumer achieved a remarkable 63% increase in consolidated net profit for Q1 FY25, reaching ₹40 crore.
This is a significant jump from ₹24 crore reported in the same period last year. The company’s strong performance highlights its robust growth strategy and successful market positioning.
Revenue growth highlights
Revenue from operations for the April-June quarter climbed 19% year-on-year, totalling ₹554 crore. This growth is up from ₹464 crore reported in Q1 FY24.
Despite a slightly slower revenue growth rate compared to the previous quarter, where revenue had increased by 21%, the company’s performance remains robust.
Product business expansion by Honasa consumer
Honasa Consumer’s product business saw an impressive 20.3% increase, driven by a 25.2% rise in underlying volume growth.
This expansion underscores the company’s successful efforts in scaling its product offerings and improving market share.
EBITDA margin improvements
The company’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin improved to 8.3%, up from 6.3% a year ago. EBITDA surged 57.9% to ₹46 crore, compared to ₹29 crore in Q1 FY24.
This margin expansion reflects enhanced gross profit margins and operational efficiencies.
Honasa consumer’s distribution strategy
Honasa Consumer has significantly boosted its distribution network, now reaching nearly 2 lakh FMCG retail outlets across India.
This expansion represents a 30% increase from the previous year. The company’s shift to a direct distribution model in top cities has improved retailer connections and in-store execution, aligning with its omnichannel strategy.
New product innovations
The company’s focus on innovation is evident in its new product launches this quarter. New products contributed around 9% to Q1 FY25 revenue, highlighting Honasa’s commitment to staying ahead in the market.
Key innovations include the Mamaearth Rice Water Dewy Sunscreen, The Derma Co Snail Peptide 96 Hydrating Serum, and Aqualogica Glow+ Infused Tinted Sunscreen.
Ayurvedic brand Ayuga discontinued
In a strategic move, Honasa Consumer has discontinued its Ayurvedic skincare brand, Ayuga. Launched in February 2022, Ayuga struggled to gain traction and achieve product-market fit. Despite efforts to revitalise the brand, it failed to gain momentum, leading to its phase-out.
Expansion into premium segments
Honasa Consumer is tapping into the premium segment with the introduction of ‘Skin Renew by Dr. V’ under The Derma Co brand. This new range, developed in collaboration with dermatologist Dr. Vanita Rattan, aims to enhance the company’s positioning in the premium skincare market.
Stock performance and market outlook
Despite the strong financial results, shares of Honasa Consumer closed 4.70% lower at ₹473 per share on the NSE. This decline reflects broader market trends and investor sentiment, but the company’s solid fundamentals suggest a positive outlook for future growth.
Honasa Consumer’s Q1 FY25 results showcase a robust performance driven by strategic expansions, innovative product launches, and an effective distribution strategy.
As the company continues to innovate and adapt to market demands, it remains well-positioned for sustained growth in the beauty and personal care industry.
