Honasa Consumer shares and Mamaearth shares: Jefferies expects Honasa Consumer to grow at a compounded annual rate of 27% between FY23 and FY26, with increased margins.
Honasa Consumer Ltd, which had fallen to a low of Rs 256.10 on Friday morning, received a strong confidence ‘Buy’ signal from Jefferies with a target price of Rs 520, triggering a recovery in the newly-listed stock. Jefferies expects Honasa Consumer to increase at a compounded annual rate of 27% between FY23 and FY26, with improved margins. Honasa Consumer has a substantial moat as a scaled-up internet-first franchise, according to the company, and while the web remains at the center, Honasa currently gets a third of its revenue from offline, according to the company.
The Jefferies goal projected a 103% upside potential at the day’s low. The stock soared to a high of Rs 317.95 on the BSE, recouping the majority of its losses since listing. According to Jefferies, Honasa Consumer has been able to transform itself into a brand house, with fresh products accounting for 33% of revenue.
“Over the next three years, Honasa should report industry-leading growth of 27%.” We value at 6 times September 2025 EV/Sales (at a discount to HPC rivals; implies 67x FY26 P/E) to get at a target of Rs 520, representing a potential upside of more than 70% on CMP. Excessive rivalry, notably from large FMCG businesses, aggressive M&A, and a lack of scale-up in newer brands are key dangers.” Jefferies said.
Product innovation and the ability to quickly identify emerging trends has been a key differentiator for Honasa, particularly in comparison to FMCG incumbents, according to the foreign brokerage, adding that new products account for 25-50 percent of Honasa’s incremental revenue each year, as the company has gained an early mover advantage in several products.
According to Jefferies, Honasa similarly employs a millennial-focused approach distinguished by a focus on content and community. According to the brokerage firm, BPC will certainly rise in the double digits, with stable gains forecast for the online channel. Honasa, it aid, has a strong online presence in high-growth BPC categories such as skincare, hair care, cosmetics, and so on, as well as at masstige and premium price points.
According to Jefferies, Honasa has created a house of brand architecture with a six-brand portfolio, with Mamaearth’s salience reduced to 65% and revenues of Rs 1,200 crore in FY23, putting it in the league of top BPC brands in India.
“Offline is a higher margin channel than online, and this is a key focus for the Mamaearth brand.” It is already present in 150k+ GT outlets and 31 MT chains, and its offline share increased to more over 35% in FY23 and is expected to develop further. Honasa reported a 6% Ebitda margin in 1QFY24, while prioritizing growth over profitability, which we feel is the ideal strategy. “We expect D/D margin to increase by FY26E, driven by marketing spend optimization and scale benefits,” it says.
Frequently asked questions
Why is the Honasa consumer share falling?
Honasa Consumer, Mamaearth’s parent company, had its shares tumble about 5% on Thursday, following a flat listing on Wednesday (November 9) due to profit booking. The stock has dropped as much as 4.7 percent intraday to a new low of 307 today.
Which company owns Mamaearth?
Founders Varun Alagh and Ghazal Alagh are selling 32.86 lakh shares of the 10.67 crore shares they own in Honasa Consumer Ltd, the parent company of beauty and personal care brand Mamaearth, in the business’s ongoing initial public offering (IPO).
Who is the owner of honasa?
Varun Alagh
Founders Varun Alagh and Ghazal Alagh are selling 32.86 lakh shares of the 10.67 crore shares they own in Honasa Consumer Ltd, the parent company of beauty and personal care brand Mamaearth, in the business’s ongoing initial public offering (IPO).
Is honasa profitable?
“The company is still profitable as it evolves, and that’s what we expect in the future,” she continued. Mamaearth, The Derma Co, Bblunt, Ayuga, Aqualogica, and Dr Sheth’s are among the six brands owned by Honasa Consumer. Mamaearth is the company’s flagship brand, generating the most revenue for the Gurugram-based firm.
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