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Honasa Consumer: Honasa Consumer shares plummet to 52-week low on Q2 loss

 November 18, 2024  Leave a Comment on Honasa Consumer: Honasa Consumer shares plummet to 52-week low on Q2 loss
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Mamaearth‘s parent Honasa Consumer saw its shares hit the lower circuit on Monday, diving 20% to a 52-week low of Rs 295.80 on the BSE, following its earnings report for the second quarter of FY25.

For the July-September period, Honasa Consumer reported a 7% year-on-year (YoY) decline in operating revenue at Rs 462 crore. It posted a net loss of Rs 19 crore in the quarter, compared to a net profit of Rs 30 crore in the same period last year, on the back of its offline distribution restructuring exercise.

Honasa Consumer Ltd Stock chartETtech

Honasa’s stock had ended up 3.8% on Thursday on the BSE. Markets were shut on Friday on account of Guru Nanak Jayanti.

To enhance offline sales contribution, Honasa Consumer has initiated a significant transition, moving its distribution strategy from super stockists to direct partnerships with distributors. In an interview with ETtech, founder and chief executive Varun Alagh said the company had expected and planned for the restructuring impact, but it turned out to be relatively higher.

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“We had imagined it to be a Rs 50 crore inventory impact, but it turned out to be a Rs 70 crore impact. That has led to scale reduction, provisions in expiry and damages of the returned stock, which impacted the Ebitda as well, which was higher than what we had expected,” he said.

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Alagh added that the overall growth has also been lower than expected due to the underperformance of its flagship brand Mamaearth. “Mamaearth continues to be the largest brand in our portfolio and we continue to take all steps to get it back to the growth path. As for the other brands, the categories they participate in, they will get their due level of investments.”



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