The stock traded at its highest level since its debut on November 7. Until 10:07 am; a total of 10.1 million shares changed hands on the NSE and BSE. Buy orders were open for a total of about 1.4 million shares on the exchanges, data showed.
According to the company’s first-ever earnings update since its stock market debut earlier this month, consolidated revenue from operations grew 21 percent YoY to Rs 496.1 crore, driven by 27 percent YoY volume growth. The company’s like-for-like growth for continuing operations was 24 percent, Honasa said.
The company’s earnings before interest, taxes, depreciation and amortization (Ebitda) grew 53 percent year-on-year to Rs 40 crore. Ebitda margin improved by 170 basis points to 8.1 percent, compared to 6.4 percent in the previous year’s quarter.
Dr Sheth’s has become the fourth brand from the Honasa portfolio to join the Rs 150 crore club in terms of annual recurring revenue, after Aqualogica and Derma Co.
Meanwhile, Honasa’s share price has risen 65 percent from Rs 256.10 on November 10 during intraday trading on the BSE. The sharp rally in the stock is attributed to Jefferies reporting on the stock with a buy rating and price target of Rs 520 per share.
Honasa made a lackluster stock market debut, listing at Rs 337.15, a 4 percent premium over its issue price of Rs 324 per share on the BSE.
Honasa’s flagship brand, Mamaearth, is designed to meet the essential customer desire for safe and natural products. Mamaearth focuses on developing beauty products that are free from harmful toxins and made with natural ingredients. By the end of FY23, Mamaearth had become the fastest growing BPC brand in India, with annual revenues of Rs 1,000 crore within six years of its launch.
Product innovation and the ability to identify rapidly emerging trends have been a key differentiator for Honasa. versus established FMCG companies. 25-50 percent of annual sales come from new products, as Honasa has achieved an early mover advantage in several products. Honasa also uses a millennial-focused model, characterized by a focus on content and community, Jefferies analysts said.
“Honasa should report industry-leading growth of 27 percent over the next three years. We estimate EV/sales of 6x Sep-25 (at a discount to HPC peers; implies 67x FY26 price/earnings) to arrive at a price target of Rs520. Key risks: excessive competition, including from leading FMCG companies, aggressive mergers and acquisitions and lack of scale among newer brands,” the brokerage firm said in a November 10 report.