Shares of Mamaearth parent Honasa Consumer fell 20% to touch a 52-week low at INR 295.80 apiece on the BSE during the intraday trading session today (November 18) after the company’s dismal Q2 earnings. Weeks ahead of the BBLUNT’s parent quarterly reports, shares of the firm plummeted over 6% to a low of INR 490 apiece on the NSE during early trading on September 12, following a 10.9% interest in the company changed hands via a block deal valued at INR 1,763.3 Cr.
Honasa reports its first quarterly decline in five quarters
Honasa Consumer reported a net loss of Rs 19 crore for the July–September quarter, which was the company’s first quarterly loss in more than a year. Its profit of Rs 29 crore for the same quarter previous year stands in sharp contrast to this. Revenue for the business also suffered, falling 7% year over year to Rs 462 crore from Rs 496 crore during the same time last year. A slowdown in demand and issues brought on by adjustments to the distribution plan have been blamed for the decline in revenue.
Even though the expenses decreased sequentially, they increased by 9% year over year to Rs 506 crore. Significant inventory changes brought about by Honasa’s transition to a direct-to-consumer (D2C) business model under Project “Neev” have further impacted the company’s financial results. Spending aggressively to generate demand in the face of difficult market conditions is seen in the increase in advertising and promotional expenses to 37% of revenue from 35% a year ago.
Honasa Consumer Q2 Results
In the second quarter, Mamaearth and The Derma Co.’s parent firm, Honasa Consumer, lost Rs 18.57 crore. Revenue reached Rs 461.82 crore, a 6.9 percent decline. Inventory adjustments were the company’s explanation for this decline. Honasa Consumer is looking for future growth by strategically altering its distribution network in spite of the setback.
For the second quarter that ended on September 30, 2024, a consolidated loss of Rs 18.57 crore due to inventory adjustment. In a regulatory filing from the previous year, the company stated that it had reported a profit after tax of Rs 29.43 crore.
