Mamearth Q2 Highlights: Revenue, Profit Rise On Strong Operating Performance

Honasa Consumer, the parent of D2C beauty unicorn Mamaearth, on Wednesday (November 22) released its first quarterly financial results since its listing on November 2.

Here are the key highlights from the company’s financials for the second quarter (Q2) of the financial year 2023-24 (FY24): 

Headline Numbers: Honasa Consumer’s profit after tax (PAT) zoomed 94% to INR 29.4 Cr in Q2 FY24 from INR 15.2 Cr in Q2 FY23. The surge came largely on the back of rationalised advertisement costs and healthy topline growth. 

Revenue from operations jumped 21% to INR 496.1 Cr in the quarter ended September 2023 from INR 410.5 Cr in Q2 FY23.

Meanwhile, expenses grew 18.2% to INR 464 Cr in Q2 FY24 compared to INR 392.3 Cr in the year-ago period. 

Half-Yearly Numbers Shine: The headliner during the six-month period ended September 2023 was PAT, which soared 1,377% to INR 54 Cr in H1 FY24 from INR 4 Cr in H1 FY23. 

Operating revenue also registered a healthy 33% growth in H1 FY24 and stood at INR 961 Cr as against INR 723 Cr in H1 FY23. On the other hand, total expenditure rose more than 25% to INR 907.1 Cr in the first half of FY24 from INR 722.9 Cr in H1 FY23. 

Mamaearth’s EBITDA On Right Trajectory: The startup’s earnings before interest, tax, depreciation, and amortisation (EBITDA) improved 53% year-on-year (YoY) to INR 40 Cr in Q2 FY24. EBITDA stood at INR 26 Cr in Q2 FY23. 

On similar lines, EBITDA margin expanded 169 basis points to 8.1% in the quarter ended September 2023 from 6.4% in the year-ago period. 

The company attributed this increase to greater leverage and effectiveness in advertising spending. In an investor presentation, Mamaearth claimed that its marketing and employee benefit expenses ‘optimised on account of economies of scale kicking in’.

Omnichannel Bet Continues To Pay Off: While a major chunk of the company’s revenue growth came from online operations (40%), growth in revenue from offline channels stood at 33% in H1 FY24.

The company also claimed that quick commerce has emerged as a strong channel and is witnessing more than 100% YoY growth. 

On the offline front, the company said it increased FMCG retail footprint to more than 1.65 Lakh outlets in India at the end of Q2 FY24, up 47% YoY. It also enhanced its omnichannel distribution by increasing the number of Exclusive Brand Outlets (EBOs) to 97 at the end of September 2023. 

Leveraging Digital Play: The company claimed it was the ‘most searched’ beauty and personal care (BPC) brand in India in the first half of the current fiscal year. Without disclosing actual figures, the unicorn said its brand searches improved 16% YoY in H1 FY24. 

The D2C unicorn’s brand The Derma Co. logged 44.8 Lakh Google searches in H1 FY24 compared to 20.5 Lakh in the year-ago period. 

Scaling House Of Brands: Honasa said its median YoY growth stood at 33% in H1 FY24 compared to 9% clocked by FMCG companies. 

Leading from the front were new products, which contributed nearly 13% to the revenue from operations in H1 FY24.

Meanwhile, The Derma Co. is slated to deliver an annual run rate (ARR) of more than INR 380 Cr while Aqualogica has become Honasa’s fastest brand to clock an ARR of INR 180 Cr in a span of just 19 months. 

It also said that Dr. Sheth’s has scaled more than 30X since acquisition and is well-poised to achieve an ARR of INR 150 Cr. Meanwhile, BBlunt also appears to be on a ‘strong growth trajectory’, having ramped up its product business by more than 3X since acquisition.

BBlunt added four salons during the September quarter, taking the total count to 14.

“… Honasa has been able to deliver market-beating growth and constantly improve the profitability portfolio of the company. Our business has grown by 33% YoY in H1 FY24 which is 3.8 times the median growth of FCMG companies in India. Mamaearth, our largest brand has entered the Top 15 BPC brands in India, overtaking many legacy brands, as per a report by Jefferies,” said Honasa Consumer chairman and chief executive officer (CEO) Varun Alagh.