Honasa Consumer Reports Strong Q2 FY27 Performance
Honasa Consumer Ltd., the parent company of Mamaearth, announced impressive financial results for the second quarter of fiscal year 2027 (Q2 FY27). The company recorded a significant 35.9% year-on-year (YoY) increase in sales, slightly exceeding its own business update projections. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a substantial 95% YoY surge, with the EBITDA margin expanding by 385 basis points to reach 12.7%.
These strong Q2 figures positioned Honasa's EBITDA 8% above CLSA's estimates and 16% higher than consensus expectations, despite the margin being 60 basis points below CLSA's forecast due to a gross margin shortfall.
CLSA Reaffirms 'Hold' Rating, Adjusts Target Price
Following the release of Honasa Consumer's September quarter results, brokerage firm CLSA has maintained its 'Hold' rating on the stock. However, CLSA marginally increased its target price for Honasa Consumer shares to Rs 506, up from its previous target of Rs 505. The adjustment reflects the company's better-than-expected operating performance and sales growth across its diverse portfolio of brands and sales channels.
Growth Across Brands and Channels
CLSA highlighted that Honasa's focus categories achieved over 40% growth, contributing more than 80% of total sales. While its flagship brand, Mamaearth, sustained growth in the high-teens range, the company's younger brands demonstrated accelerated growth of 45% YoY.
The growth was also broadly distributed across various sales channels:
- General trade secondary sales and modern trade (MT) offtake both increased by more than 40%.
- E-commerce recorded a 20% growth.
- Honasa's offline distribution network continued its expansion, with general trade reach growing 26% YoY to approximately 3.2 lakh outlets.
- Average secondary sales per retailer also rose by over 30%.
The Derma Co's offline presence expanded to over 65,000 outlets, further underscoring the company's strategic push into physical retail spaces through its salon and beauty businesses.
Outlook and Estimates Revision
In light of Honasa's robust Q2 performance, CLSA revised its FY27-FY29 estimates upward by 2%. This revision is primarily driven by a 4% increase in top-line forecasts, partially offset by slightly adjusted margin assumptions. CLSA anticipates Honasa Consumer to achieve an EBITDA margin of 15.2% in FY30, aligning closely with management's guidance of 15% by FY31.
On Monday, November 9, 2026, Honasa Consumer shares closed 3% higher at Rs 483.60, building on a previous close of Rs 469.70.