The Derma Co On Track To Achieve INR 1,000 Cr ARR In 3-5 Years: Mamaearth

Listed D2C unicorn Mamaearth’s parent Honasa Consumer projects its skincare brand The Derma Co. to clock an annualised revenue run rate (ARR) of INR 1,000 Cr in the next three to five years.

In its annual report for the financial year 2023-24 (FY24), the company’s cofounders Ghazal and Varun Alagh said that they expect the startup’s other two brands, Aqualogica and Dr. Sheth’s, each to enter the INR 500 Cr ARR club between FY27 to FY29. 

On BBLUNT, the company estimated that the haircare brand would reach an ARR of INR 250 Cr during the same timeline.

“We expect The Derma Co. to enter the INR 1,000 Cr ARR club, Aqualogica and Dr. Sheth’s to enter the INR 500 Cr ARR club, and BBLUNT to enter the INR 250 Cr ARR club in the next 3-5 years,” read a joint introduction to the report by the cofounders. 

On the D2C unicorn’s future trajectory, the report underlined that Honasa plans to continue its focus on the “growth drivers of the business in the future including expanding our distribution and increasing brand awareness”. The startup also said that it will also look to incubate or acquire “new engines of growth” and shore up efficiency going forward.

Meanwhile, Mamaearth continues to ramp up its omnichannel play. The company, in its annual report, said that the contribution of its offline channel to its net sales have surged almost 4X to nearly 35% in the financial year 2023-24 (FY24) compared to a mere 9% in the year ended March 2020. 

“… Data-driven product innovations have played an important part in driving growth, with new product development (NPD) contributing to 18% of our FY24 revenues,” added Honasa in its annual report.

At the end of FY24, Honasa claimed to have more than 111 exclusive brand outlets (EBOs) across the country as well as 8,000+ stores spanning 30 modern trade chains such as Apollo Pharmacy and Reliance Retail’s Smart Bazaar. 

Additionally, it claimed that its flagship brand Mamaearth’s products were stocked at 1.88 Lakh retail outlets at the end of March 2024.

On the digital front, Honasa said that the majority of its online sales (over 56% of its total units sold online) came from Tier-II or below cities on the back of higher ecommerce penetration. 

“In FY24, the company strengthened its position on ecommerce platforms. This performance was further aided by enhancing presence on platforms with (a) stronger presence in lower pop-strata towns. Additionally, rapid growth was seen in emerging channels, with quick commerce emerging as one of the fastest-growing channels,” underlined the annual report. 

Founded in 2016 by the husband-wife duo, Honasa’s product portfolio comprises six beauty and personal care brands which include Mamaearth, The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s. It sells a range of products through online as well as offline channels. 

Honasa’s net profit jumped 21% year-on-year (YoY) to INR 30.47 Cr in Q4 FY24. Meanwhile, operating revenue also jumped 21% to INR 471.09 Cr in the quarter under review as against INR 387.8 Cr in the year-ago quarter. 

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