Honasa Consumer: Mamaearth Stock Surges 45% Since IPO—What’s Next?

Honasa Consumer: Mamaearth Honasa Consumer (Mamaearth) has been getting a lot of attention since Goldman Sachs started covering the stock with a “buy” rating.

The brokerage has set a price of Rs 570 for each stock indicating that it could hiked more than 26% from its last closing price after the June quarter earnings report.

Goldman Sachs also noted that “India beauty transformation” could grow significantly in the coming years which made investors confident about the future of the company.

Due to this, Honasa’s shares went up 4.5% to Rs 472 in intra-day on Tuesday, August 13. This came after two straight sessions of losses of 9% after the company reported its June quarter results.

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India’s beauty business is growing quickly, according to Goldman Sachs. This could be a good chance for Honasa Consumer (Mamaearth) to stand out.

Goldman Sachs also said that the top new beauty brands’ sales grew by 28 times from FY19 to FY23. Examples include Honasa and Minimalist.

The firm thinks that Honasa’s sales will grow by 2.5 times and its EBITDA margins will double from FY24 to FY30.

The company wants its Derma skincare brand to grow even more, and by FY27, it wants it to be sold in 400,000 retail shops.

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Honasa Consumer currently has a low EBITDA margin of 7% despite having the highest gross margins in FMCG of 70%.

When the company first went public in November, the price of a share was Rs 324. Since then, the stock price has gone up by 45.7%. The company has had a rough year in 2024, and even though stock prices have gone up, it has only grown by 7% so far.

In June, it stayed at 7.5% and in June it went down by 2%, however, in August it hasn’t changed till now.

In a statement, the company said, “Honasa has captured a strong market share in the face wash category in online while steadily gaining ground offline, driven by its House of Brands strategy and innovation capabilities. The category achieved approximately INR 800 crore GMV ARR (annual revenue run-rate) for Honasa Consumer.”

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