Mamaearth parent’s return to profitability drives investor optimism, though mixed brokerage views point to cautious optimism ahead
Q2 Results Trigger Market Surge
Shares of Honasa Consumer — the parent of Mamaearth — rallied 9.4% intraday to INR 308.55 on the BSE on November 13, following its Q2 FY26 earnings announcement.
- The stock closed 2.8% higher at INR 289.85, pushing its market capitalisation to INR 9,430.84 Cr (~$1.1 Bn).
- The gains came after Honasa reported a consolidated net profit of INR 39.2 Cr, reversing a loss of INR 18.6 Cr in Q2 FY25.
The profit swing reflects a successful transition from a super-stockist-led model to a direct distribution structure, which had temporarily dented performance last year.
Revenue Trends & Profitability Signals
Honasa’s operating revenue for Q2 FY26 rose 17% YoY to INR 538.1 Cr, up from INR 461.8 Cr in Q2 FY25.
- On a QoQ basis, revenue declined 10%, while net profit slipped 5% from INR 41.3 Cr in Q1 FY26.
- However, the company clarified that a INR 28 Cr revenue impact due to Flipkart’s new settlement structure distorted growth metrics.
- On a like-for-like basis, revenue growth would have been over 22% YoY, with no impact on overall profitability.
Notably, EBITDA margin improved to 8.9%, reflecting better cost control and operational leverage.
Mixed Brokerage Sentiment
While investors welcomed the return to profitability, brokerages issued mixed ratings following the Q2 results:
- Jefferies: Maintained ‘Buy’ rating; target price INR 450
- ICICI Securities: Retained ‘Buy’; target price INR 400
- HSBC: Rated ‘Reduce’; target price INR 264
- Emkay Global: Maintained ‘Sell’; target price INR 250
Jefferies cited margin gains and strong offline expansion, especially by Mamaearth, as key positives.
HSBC, however, cautioned that Honasa remains a “low double-digit grower” and valuations may already reflect near-term upside.
Offline & Brand Expansion Drives Momentum
Honasa continues to invest in expanding its offline footprint and brand portfolio:
- Offline reach grew 35% YoY to 2.5 Lakh FMCG outlets.
- New launches include Luminve (prestige skincare segment) and a 25% stake acquisition in Fang (oral care brand).
- The company also claimed strong traction across its younger brands, which grew 20% YoY.
Additionally, The Derma Co crossed INR 750 Cr annual revenue run rate (ARR), while Mamaearth’s rice facewash exceeded the INR 100 Cr ARR milestone.
Market Outlook
Despite a sequential dip, the year-over-year recovery, portfolio diversification, and offline channel strength signal an improving trajectory.
- Honasa’s stock is up over 18% year-to-date, reflecting renewed investor confidence.
- Going forward, the challenge will be sustaining margin improvements, managing platform cost structures, and balancing growth expectations with premium valuations.
Honasa’s Q2 performance has injected fresh momentum into its stock, with profitability return and margin gains affirming its strategic reset. While brokerages remain divided, the company’s continued brand innovation, offline scale-up, and entry into new personal care categories provide a solid foundation for future growth.
