Mamaearth Q2 profit at ₹29.4 cr; revenue up 21% on volume growth

Honasa Consumer, the parent company of Mamaearth brand, has reported a 93% increase in its net profit for the July-September 2023 quarter at ₹29.4 crore as compared to ₹15.2 crore profit during the same period last year.

Varun and Ghazal Alagh-led company's revenue from operations surged 21% to ₹496 crore against ₹410 crore revenue recorded in the same quarter last year. The rise in Q2 revenue was driven by volume growth of 27% YoY.

Mamaearth CEO and chairman Varun Alagh says the company's business has grown by 33% YoY in H1 FY24, which is 3.8 times the median growth of FCMG companies in India. 

"Mamaearth, our largest brand has entered the Top 15 BPC brands in India...Our profits grew much faster than our revenues, with H1 PAT growing by 1,377% to ₹54 crore. Dr Sheths has become the 4’th brand from Honasa portfolio to enter the ₹150 crore Club after Aqualogica and Derma Co," says Alagh.

In H1 FY24, the digital-first beauty and personal care company delivered ₹961 crore in revenue from operations, growing 33% YoY, driven by volume growth of 35% YoY. Honasa Consumer achieved an EBITDA of ₹70 crore and PAT came out to be at ₹54 crore. 

The Honasa stock dipped 4.05% to ₹352.10 on the BSE today, taking its m-cap down to ₹11,328.70 crore. Since its listing earlier this month, the share has surged 9.78%. 

In the first half of the fiscal year, Honasa saw 3.8X growth compared to the FMCG market in H1. "Honasa continues to operate at a negative working capital of minus 5 days in H1 FY24. It increased offline distribution to 1,65,937 outlets, up 47% YOY and entered top 15 BPC brands in India, ahead of many legacy brands (based on a report by Jefferies)," the company adds.

Honasa made its debut on Dalal Street earlier this month when shares of the company co-founded by the husband-wife duo Varun and Ghazal Alagh debuted on the National Stock Exchange (NSE) at ₹330, a premium of 1.85% over the issue price, and on the Bombay Stock Exchange (BSE) at ₹324 apiece, equal to the IPO issue price. The listing of was below market expectations as its shares were commanding a grey market premium (GMP) of 7% over the issue price.

The ₹1,701 crore IPO of Mamaearth, consisting of an offer for sale (OFS) of 4.12 crore shares and a fresh issue of shares worth ₹365 crore, opened for subscription between October 31 and November 2. Ahead of the public offering, Honasa also raised ₹765.20 crore from anchor investors on October 30, 2023. 

Since launching flagship toxin-free skincare brand Mamaearth in 2016, Honasa has added five new brands to its portfolio -- The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s.