Honasa Consumer shares in focus after Q4 profit slips 18% YoY despite 13% revenue growth
Honasa Consumer
, the parent company of
Mamaearth
, will be in focus on Friday after the company reported an 18% year-on-year (YoY) decline in consolidated net profit to Rs 25 crore in Q4FY25, compared to Rs 30 crore in the same period last year.
Revenue from operations rose 13% YoY to Rs 534 crore from Rs 471 crore in the corresponding quarter of the previous financial year.
As part of Project 'Neev', the holding company transitioned to a
direct distribution model
in the top 50 cities during the quarter ended September 30, 2024. This involved eliminating the super stockist layer and replacing certain distributors with Tier 1 distributors to better service retailers. Due to this shift, the company recorded a sales return provision of Rs 63.51 crore and recognised inventory/right-to-return assets worth Rs 11.44 crore in that quarter.
By March 31, 2025, the outstanding sales return provision had reduced to Rs 5.20 crore with no corresponding inventory/right-to-return assets, down from Rs 8.95 crore and Rs 1.09 crore respectively, as of December 31, 2024, a company filing said.
The company said that its business continues to grow efficiently, with EBITDA standing at 5.1% in Q4 FY25, reflecting stronger operational performance.
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Gross profit margin improved to 70.7% in Q4 FY25, up 76 bps YoY, driven by an improved product mix and operational efficiencies.
The company claimed that Mamaearth's strategy shift shows green shoots with double-digit YoY growth in key categories across e-commerce and modern trade in Q4 FY25.
Honasa Consumer expanded retail distribution by 26% YoY to 2.36 lakh outlets while younger brands continued their growth momentum with 30%+ YoY growth in FY25.
The Derma Co.
hit Rs 100 crore ARR in offline channels.
The direct distribution-led strategy is strengthening reach, with over 1 lakh unique outlets billed in FY25 and direct distributor contribution surging from 38% in FY24 to 71% in Q4 FY25.
Also read: Q4 results today:
JSW Steel among 200 companies to announce earnings on Friday
Management commentary
"As we scale, our vision remains clear—building Honasa into a future-ready house of brands through disruptive innovation, deeper offline penetration, and consumer-centric offerings. We're not just creating brands that lead today, but shaping the future of India's beauty and personal care landscape,' said Varun Alagh, Chairman and CEO & Co-founder of Honasa Consumer.
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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