Honasa Consumer’s stock, the parent company of Mamaearth, surged by 9% following a notable improvement in its performance in the September quarter (Q2FY26). The market responded positively to Honasa’s return to profitability and enhanced margins, driven by a more favorable product mix and steady growth in its key beauty and personal care segments.
During the trading session, the stock reached an intraday high of Rs 308.5 on the BSE before settling around Rs 294.05, still marking a gain of over 4.30%. Year-to-date, the stock has climbed nearly 20%, although it remains below its IPO price of Rs 324.
In Q2FY26, Honasa reported revenue of Rs 5,381 crore, a 16.5% increase from the previous year, with volumes up by 16.7%. Adjusting for changes in Flipkart settlement accounting, the like-for-like growth stood at a robust 22.5%. The company saw a significant improvement in profitability, with gross margin expanding to 70.5% and Ebitda margin reaching 8.9%, compared to a loss in the same period last year. Net profit stood at Rs 39.2 crore, reversing a loss of Rs 18.6 crore. This turnaround was attributed to disciplined cost management, reduced advertising expenses, and improved operational efficiency as volumes expanded.
Honasa’s core categories such as face washes, sunscreens, moisturizers, and haircare drove over three-fourths of its revenue, displaying broad-based growth. Mamaearth gained traction by increasing its market share in face cleansers, while The Derma Co. surpassed a Rs 750-crore annual revenue run rate and emerged as India’s leading sunscreen brand. The company aims to elevate The Derma Co.’s annual revenue run rate to Rs 1,000 crore in the coming years.
In terms of growth drivers, Honasa focused on innovation, introducing Luminve in the prestige skincare segment and acquiring a 25% stake in Fang, a premium oral-care startup. The company also expanded its offline presence substantially, with a notable increase in direct outlet coverage in FMCG retail outlets.
Despite the positive performance, analysts are divided on the stock’s valuation. ICICI Securities and Jefferies maintain a positive outlook, citing Honasa’s strong execution and growth potential. On the other hand, Emkay Global and HSBC are more cautious, emphasizing the stock’s expensive valuation relative to the company’s performance.
For retail investors, the decision hinges on whether Honasa can sustain its growth trajectory and justify its valuation. While the company shows promising momentum, high valuations pose a risk, prompting a diverse range of opinions among analysts. As the stock continued its upward trend, trading around Rs 299.6 on Thursday, up by 6.2%, investors are advised to consider their risk tolerance and investment strategy before making decisions.