Honasa Slips Into The Red, Posts INR 19 Cr Loss

SUMMARY

The company’s top line also took a hit as revenue from operations declined nearly 7% to INR 461.8 Cr in Q2 FY25 from INR 496.1 Cr in Q2 FY24

The listed D2C major attributed the loss and fall in sales to its ongoing transition from super-stockist-led model to direct distributor model

Honasa Consumer’s total expenditure rose to INR 506.2 Cr in Q2 FY25 from INR 464 Cr in the year-ago period

D2C brand Mamaearth’s parent Honasa Consumer slipped into the red in the quarter ended September 2024 (Q2 FY25), posting a consolidated net loss of INR 18.6 Cr. The company had reported a net profit of INR 29.4 Cr in the year-ago quarter and INR 40.3 Cr in the preceding June quarter.

Top line also took a hit as revenue from operations declined nearly 7% to INR 461.8 Cr during the quarter under review from INR 496.1 Cr in Q2 FY24.

The listed D2C major attributed the loss and fall in sales to its ongoing transition from super-stockist-led model to direct distributor model.

“Over the past few months, we’ve been implementing Project Neev to optimise our distribution model. In this quarter, we have taken strategic steps towards transitioning from super-stockists to direct distributors in top 50 cities. This transition has impacted our revenue and profits, leading to a slowdown for Mamaearth,” the company said.

As a result, Honasa reported a negative EBITDA margin of 6.6% during the quarter under review as against 8.1% in the year-ago period. However, Honasa said that its umbrella brands such as The Derma Co., Aqualogica, BBlunt, and Dr. Sheth’s achieved more than 30% year-to-date (YTD) growth in Q1 and Q2 of FY25.

Honasa Consumer chairman and CEO Varun Alagh said, “… Our House of Brands strategy continues to drive growth, with each of our emerging brands – The Derma Co., Aqualogica, BBlunt, and Dr. Sheth’s – achieving over 30% year-on-year growth in H1 (first half of FY25). In core categories like sunscreens, face washes, and serums, our growth in H1 is more than 28%…”.