Shares of Honasa Consumer, the parent company of Mamaearth, fell over 6% to ₹444 on Monday, despite reporting a 63% increase in net profit for the June quarter of FY25, which rose to ₹40 crore from ₹24 crore last year. The company’s revenue also grew by 19% year-on-year to ₹554 crore.
Honasa’s product business saw a growth of 20.3%, with a 25.2% increase in the volume of products sold. The company’s EBITDA margin improved by 201 basis points to 8.3%, resulting in an EBITDA of ₹46 crore. This strong performance was driven by better profit margins and efficiencies from scaling up.
So, should you buy, sell, or hold Honasa Consumer’s stock? Here’s what the experts say:
- Jefferies: They recommend buying the stock but have lowered the target price to ₹545 from ₹590. Although Q1 results were good, they were not as strong as expected in terms of revenue growth. Jefferies sees ongoing volatility due to high competition and the company still being in its early stages.
- Emkay: They also suggest buying, with a target price of ₹525. They have adjusted their sales estimates down by 4% for FY25 and slightly lowered their margin assumptions, but they remain optimistic for the longer term.
- JM Financial: They acknowledge that the company’s recent adjustments in its distribution channels will impact sales in the short term, but they believe performance will stabilize in the coming quarters. Despite near-term pressure on the stock, they remain positive about the long-term growth potential of Mamaearth and its other brands.
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