Mamaearth Continues To Rally; Shares Jump 12.4% To End At A Record High On Friday

Rallying for the second straight session, shares of Honasa Consumer Ltd, the parent entity of D2C unicorn Mamaearth, jumped 12.45% to INR 475.1 on the BSE on Friday (November 23), ending at a new record high.

During the intraday trading, the shares jumped as much as 15.3% to INR 487.

It must be noted that Mamaearth jumped 20% during the intraday trading on Thursday, touching the upper price band at INR 422.5 on the BSE.

The stock, which made a muted debut on the bourses earlier this month, has been on an uptrend following the company’s positive Q2 FY24 earnings announcement.

Mamaearth posted a PAT of INR 29.4 Cr in Q2 FY24, almost a 94% jump year-on-year (YoY). Operating revenue also increased 21% YoY to INR 496.1 Cr.

The company had slipped into the red in FY23, which was seen as one of the main reasons for its muted debut on stock exchanges. Compared to a net profit of INR 14.4 Cr in FY22, the startup had posted a loss of INR 151 Cr in FY23.  

While it remains to be seen how the startup performs in the entire FY24, Mamaearth posted a profit after tax (PAT) of INR 54.1 Cr in H1 FY24, which seems to have buoyed investor sentiment.

In its latest research note on Mamaearth, Jefferies increased the price target to INR 530 from INR 520 earlier, which now implies an upside of 11.6% to the stock’s last close on Friday. 

The brokerage noted in its investment thesis that Honasa Consumer has been a notable outlier among digital-first beauty and personal care brands in India, from the standpoint of scale, profitability, and capital efficiency. 

“We expect it to deliver a sector-leading revenue growth over the coming years, coupled with improving profitability,” Jefferies said.

Shares of Mamaearth are currently trading 46.6% higher from their listing price of INR 324 on the BSE.