Honasa, the parent of popular skincare D2C brand MamaEarth has unveiled its first ever financial results post a rather decent public market debut. For the second quarter of the fiscal year 2023-24 (Q2 FY24), the company reported a notable doubling of its profits, reaching ₹30 crore during the quarter ended September 2023, marking an annual growth of 93%.
The revenue growth for the brand stood at an impressive 21%, reaching ₹496 crore in the same quarter. Additionally, Honasa revealed a substantial growth of 33% in its revenue in the first half of FY24, surpassing the median growth of 9% observed in the Fast-Moving Consumer Goods (FMCG) industry. Though the numbers are higher since Honasa’s base is relatively smaller and one can expect them to taper once they reach the FMCG industry median.
Honasa showcased financial resilience achieving an Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of ₹40 crore, reflecting a year-on-year increase of 53%. With a diverse portfolio of six brands, Honasa Consumer has solidified its position as the largest digital-first Beauty and Personal Care (BPC) company. Advertising costs for Mamaearth experienced a growth of 22% in Q2, amounting to ₹174 crore.
“Honasa (parent company of Mamaearth) has been able to deliver market beating growths and constantly improve the profitability portfolio of the company. Our business has grown by 33 percent YoY in H1 FY24 which is 3.8 times the median growth of FCMG companies in India,” Varun Alagh, Chairman and CEO of Honasa Consumer, commented on the matter. Alagh further reported that profits grew at an accelerated pace compared to revenues, with the Profit After Tax (PAT) surging by 1,377% to reach ₹54 crore in the first half of FY24.
With ₹182 crore allocated from its Initial Public Offering (IPO) proceeds for advertising over the next four years, the seven-year-old Mamaearth is set to invest substantially in television campaigns, signaling a strategic shift toward traditional media. Furthermore, Mamaearth has expanded its distribution channels offline, with NielsenIQ data indicating a 47% increase in offline distribution, reaching 1,65,937 retail outlets in September 2023. This strategic move positions Mamaearth in direct competition with established industry players in the offline retail landscape.
“Our profits grew much faster than our revenues, with H1 profit after tax growing by 1,377% to Rs 54 crore. Dr Sheths has become the 4th brand from Honasa portfolio to enter the Rs 150 crore Club after Aqualogica and Derma Co. We will continue to deliver on our commitments to our business, consumers, and investors,” Alagh added.
The brand’s foray into traditional media and offline expansion reflects a nuanced approach to market penetration, and currently, Mamaearth is known to offer a diverse range of beauty and personal care products, including hair care, body care, and makeup. Since its inception, Mamaearth has gained prominence for its innovative formulations and has successfully transitioned from a startup to a publicly listed entity, and under Alagh’s leadership, has strategically emphasized profitability. And earlier this month, Mamaearth’s parent completed a strong IPO after an subscription of 7.61 times.
