Honasa Shares Tank Over 6% To Hit Fresh All-Time Low

Shares of Honasa Consumer, the parent of Mamaearth, continued their downward trajectory on Friday (November 22), falling 5.52% to end at INR 224.30 apiece on the BSE.

The stock slumped 6.4% during the intraday trade to touch a fresh all-time low at INR 222.15.

The company’s shares have fallen over 39% in the last four trading sessions from INR 371.55 on Thursday (November 14), when the company released its financials for the second quarter of the ongoing financial year (Q2 FY25).

The sharp fall has also seen the company’s market capitalisation falling below the unicorn mark. Its market capitalisation stood at INR 7,285 Cr (about $862.6 Mn) at the end of the trading session today.

Honasa slipped into the red in Q2 FY25, posting a consolidated net loss of INR 18.6 Cr as against a profit of INR 29.4 Cr in Q4 FY24. Operating revenue also fell 7% year-on-year to INR 461.8 Cr.

The company attributed the loss and the decline in its top line to its transition from super-stockist-led model to direct distributor model.

Meanwhile, Honasa is also at loggerheads with its distributors. Earlier this week, the All India Consumer Products Distributors Federation (AICPDF) alleged that the company has been dumping its inventory with distributors and retailers, causing a financial burden of INR 300 Cr. 

The AICPDF claimed Honasa also has unsettled credit notes of INR 50 Cr. 

The beauty and personal care giant, however, refuted these allegations. The company cited its Distribution Management System data, stating its distributor network currently holds INR 40.69 Cr worth of inventory—far below the INR 300 Cr figure claimed by the AICPDF. 

It also pegged outstanding credit claims at INR 4.73 Cr as of September 30, 2024, contradicting the federation’s larger estimate.

The dispute has added to the company’s woes, exacerbating investor concerns. 

The company’s shares have now fallen 30.7% below Honasa’s IPO issue price of INR 324.