Last Updated: February 12, 2024, 11:29 IST
Mamaearth Shares Soar: Shares of Mamaearth parent Honasa Consumer soared nearly 10 per cent in today’s early deals, reaching Rs 474.90 apiece on the back of strong December quarter performance.
The company’s net profit zoomed three-fold from the previous year to Rs 26 crore in the third quarter of the current financial year.
Its consolidated revenue was up 28 per cent at Rs 488 crore. But slower consumer demand hit the numbers sequentially. Revenue was down 1.5 per cent and profit 12 per cent from the September quarter.
For the first nine months of the current fiscal year, its net profit has jumped by seven times to Rs 80 crore.
In the December quarter, its consolidated revenue surged by 28 per cent year-on-year to reach Rs 488 crore. Furthermore, the consolidated EBITDA experienced remarkable growth, soaring by 192 per cent YoY to Rs 34.5 crore, marking an increase of 397 basis points.
The company launched 122 new products (NPDs) in calendar year 23, which has contributed significantly to its revenue growth, with new product developments accounting for an impressive percentage of its year-to-date revenue.
The company said in its earnings report that its key campaigns like “Beautiful Ho Tum” and product-specific initiatives for Rosemary and Color Care have significantly bolstered its brand presence, supported by compelling visuals and high viewership numbers.
Analysts at JPMorgan downgraded the stock to “underweight” with a target price of Rs 390 a share, 10 per cent below its last closing price.
“We see downside risk to the company’s growth expectations and lower FY25/26 EPS by 4/6 percent. While higher income helped drive an in-line Q3 financials for Honasa Consumer, their revenue and EBITDA numbers were below our estimates. Moreover, the management sounds cautious amid increased competitive intensity and soft demand environment,” the brokerage firm said in a post-result review note.
Honasa’s total expenses for the quarter were Rs 464.5 crore, up from Rs 378.5 crore a year ago and Rs 463.9 crore a quarter ago.
The company launched 122 new products in the calendar year 2023 and expanded its omnichannel distribution to over 1.7 lakh touchpoints. Its distribution network grew by 37 per cent YoY.
Honasa Consumer shares have declined over 6 per cent in the past month against a percent drop in the benchmark Sensex.
Honasa Consumer stock hit a record high of Rs 510 a share on January 23, 2024.
Valuation-wise, the stock is at 99x/70x FY25/26 price-to-earnings (PE) ratio, which is demanding, believe analysts at JPMorgan.
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