Mamaearth's parent Honasa reports 63% growth in profit to Rs 40 crore in Q1FY25

Varun Alagh-led Honasa Consumer Ltd, which owns Mamaearth and other brands, has reported a significant growth in its net profit for the first quarter of the fiscal year 2025.

The company’s consolidated net profit rose by 62.9% year-on-year to Rs 40.2 crore, up from Rs 24.7 crore in the same quarter last year. The surge in profit was attributed to a strong sales momentum and expanding profit margins.

Revenue growth and market presence

During the April-June quarter, Honasa Consumer's revenue from operations increased by 19% to Rs 554 crore, compared to Rs 464 crore in the corresponding quarter of the previous year.

The company’s product business experienced a 20% growth, supported by a 25.2% increase in underlying volume growth. The growth was driven by an improvement in gross profit margins and efficiencies gained from scaling up operations.

Honasa Consumer has also expanded its market presence, reaching nearly 2 lakh FMCG retail outlets across India, marking a 30% increase in distribution compared to last year.

EBITDA performance and margin expansion

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) for the quarter surged by 57.9% to Rs 46.1 crore, up from Rs 29.2 crore in the same period last year.

This led to an improvement in EBITDA margins, which expanded by 201 basis points to 8.3% for the quarter. The company credited this improvement to better gross margins and the efficiencies gained through scaling its operations.

Strategic shifts and market leadership

Honasa Consumer is making strategic moves to strengthen its market position, particularly through its "House of Brands" strategy and innovation capabilities.

The company has captured a significant market share in the face wash category online and is steadily gaining ground offline. In this category, the brand has also achieved an annual revenue run rate (ARR) of approximately Rs 800 crore. 

The firm is transitioning towards a direct distribution model in major cities, reducing its reliance on super-distributors and enhancing its control over secondary sales.

Varun Alagh, Chairman and CEO of Honasa Consumer, highlighted the company’s focus on a consumer-centric approach, stating, "Our focus on a data-driven, consumer-centric strategy has led to a remarkable 9% contribution from new products to our revenue, while our partnerships, like with Dr. Vanita Rattan to launch ‘Skin Renew by Dr. V’ range in The Derma Co, are enhancing our premium positioning in the actives category. As we transition to a more direct distribution model, we are well-positioned to sustain and accelerate our growth trajectory."

"By leveraging our unique House of Brands strategy, purpose-driven approach, and strong emphasis on R&D and innovation, we are determined to solidify our leadership in the ever-evolving BPC FMCG segment," Alagh added.