Honasa Consumer, parent of Mamaearth jumps 8% on posting Q3; Buy or sell?

Honasa Consumer, the parent company of Mamaearth, shares jumped 8.4 per cent on Thursday, logging an intraday high at Rs 222.1 per share on BSE. The buying interest in the stock came after the company posted third quarter (Q3FY25) numbers. 

 

Around 9:33 AM, Honasa share price was up 6.47 per cent at Rs 218 per share on BSE. In comparison, the BSE Sensex was down 0.04 per cent at 76,141.28. The market capitalisation of the company stood at Rs 7,081.16 crore. The 52-week high of the stock was at Rs 546.5 per share and the 52-week low of the stock was at Rs 197.15 per share.

Honasa Q3 results

Mamaearth parent company reported its Q3 numbers after market hours on Wednesday. The company's consolidated profit rose slightly to Rs 26.04 as compared to Rs 25.9 crore a year ago. Honasa Consumer's revenue from operations in the quarter under review stood at Rs 517.51 crore compared to Rs 488.22 crore a year ago. 

 

However, Earnings before interest, tax, depreciation, and amortisation (Ebitda) stood at Rs 26 crore as compared to Rs 34 crore a year ago. Ebitda margin stood at 5 per cent from 7.1 per cent a year ago.

 

As per the filing, the company's emerging brands - The Derma Co., Aqualogica, BBlunt, and Dr. Sheth’s - delivered 30 per cent year-to-date (Y-T-D) year-on-year (Y-o-Y) growth. Additionally,  face wash, shampoo, serums, moisturizer, sun care, and baby care saw 18 per cent growth in 9MFY25. 

 

"We are continuing to build in these categories and aim to gain significant share in the next 3-5 years," said Varun Alagh, chairman and CEO & co-founder, Honasa Consumer.

Should you buy, sell or hold Honasa shares?

ICICI Securities has upgraded the stock to 'Buy' from 'Add' for a target price of Rs 400 per share. Jefferies has maintained a 'Buy' call but has cut target to Rs 320 per share from Rs 360. 

 

Emkay Financial has continued with a 'Sell' call and has cut the target to Rs 200 per cent from Rs 250. Kotak Institutional Securities has upgraded to 'Add' from 'Reduce' and cut the target to Rs 250 per share from Rs 340. 

 

Citi has iterated 'Sell' on Honasa and has significantly reduced the target to Rs 180 per share from Rs 300. Similary, JP Morgan has maintained an 'Underperform' rating and has reduced target to Rs 197 per share from Rs 300.  

 

Honasa Consumer is India’s largest digital-first beauty and personal care company, with a diverse portfolio of six brands. Uniquely positioned to capture growth trends shaping the beauty and personal care (BPC) market, the company leverages data-driven innovation and a strong omnichannel distribution network.

 

In the past one year, Honasa shares have lost 51 per cent against Sensex's rise of 6.4 per cent.