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Economic Times
2 days ago
- Business
- Economic Times
Nykaa, Mamaearth shares surge after Q1 profits
Shares of Nykaa parent FSN E-Commerce and Mamaearth owner Honasa Consumer closed at a high on Wednesday, a day after reporting profit growrh in the April-June quarter. Nykaa shares closed 4.93% higher at Rs 215.05. The stock touched an intrday high of Rs 220.75 after opening at Rs 215. The company closed the session with a market cap of Rs 61,520 crore. The counter has gained 31% year-to-date and 15% over the past few months. In the past week, it has risen nearly 3%. Shares of Mamaearth owner Honasa Consumer ended the day 6.15% higher at Rs 284.60. The stock cooled down slightly after hitting an intraday high of Rs 304.98 after opening at Rs 278.35. The market value of the company is Rs 9,256 crore. The Honasa shares have gained 14% year-to-date., but have fallen 39% over the past 12 months. Nykaa Q1 results FSN E-Commerce, parent of omnichannel beauty and lifestyle retailer Nykaa, reported a 79% rise in consolidated net profit to Rs 24 crore for the first quarter of fiscal 2026. Operating revenue rose 23% to Rs 2,155 crore. Its gross merchandise value (GMV) surged 26% to Rs 4,182 crore during the period Nykaa's mainstay beauty segment recorded a 26% GMV increase to Rs 3,208 crore, powered by robust growth in ecommerce, retail outlets, eB2B channels, and its in-house brands within the House of Nykaa portfolio. Nykaa also scaled its rapid delivery segment Nykaa Now to seven cities, including Mumbai, Delhi and Bengaluru, amid rising quick commerce the end of June quarter, Nykaa Now has delivered over 1.3 million orders. Also Read: Nykaa to acquire balance 40% stake in Nudge Wellness for Rs 15 lakh Mamaearth Q1 results Honasa Consumer, which owns brands like Mamaearth and The Derma Co., recorded a 2.7% rise in consolidated profit to Rs 41 crore, against a 7% rise in revenue to Rs 595 crore. Over the past few quarters, the Gurugram-based firm's financials were impacted by its offline distribution restructuring under Project Neev. This quarter marks a recovery from the slowdown that began in July-September brand saw double-digit growth across ecommerce, modern trade and general trade. The Derma Co's face cleanser became its third category to cross Rs 100 crore in annualised revenue runrate (ARR), after doubling company also expanded its retail footprint by 20% to over 2.4 lakh FMCG outlets.
Time of India
2 days ago
- Business
- Time of India
Nykaa, Mamaearth shares surge after Q1 profits
Academy Empower your mind, elevate your skills Shares of Nykaa parent FSN E-Commerce and Mamaearth owner Honasa Consumer closed at a high on Wednesday, a day after reporting profit growrh in the April-June quarter. Nykaa shares closed 4.93% higher at Rs 215.05. The stock touched an intrday high of Rs 220.75 after opening at Rs 215. The company closed the session with a market cap of Rs 61,520 counter has gained 31% year-to-date and 15% over the past few months. In the past week, it has risen nearly 3%.Shares of Mamaearth owner Honasa Consumer ended the day 6.15% higher at Rs 284.60. The stock cooled down slightly after hitting an intraday high of Rs 304.98 after opening at Rs 278.35. The market value of the company is Rs 9,256 Honasa shares have gained 14% year-to-date., but have fallen 39% over the past 12 E-Commerce, parent of omnichannel beauty and lifestyle retailer Nykaa, reported a 79% rise in consolidated net profit to Rs 24 crore for the first quarter of fiscal 2026. Operating revenue rose 23% to Rs 2,155 crore. Its gross merchandise value (GMV) surged 26% to Rs 4,182 crore during the periodNykaa's mainstay beauty segment recorded a 26% GMV increase to Rs 3,208 crore, powered by robust growth in ecommerce, retail outlets, eB2B channels, and its in-house brands within the House of Nykaa also scaled its rapid delivery segment Nykaa Now to seven cities, including Mumbai, Delhi and Bengaluru, amid rising quick commerce the end of June quarter, Nykaa Now has delivered over 1.3 million Consumer, which owns brands like Mamaearth and The Derma Co., recorded a 2.7% rise in consolidated profit to Rs 41 crore, against a 7% rise in revenue to Rs 595 the past few quarters, the Gurugram-based firm's financials were impacted by its offline distribution restructuring under Project Neev. This quarter marks a recovery from the slowdown that began in July-September brand saw double-digit growth across ecommerce, modern trade and general trade. The Derma Co's face cleanser became its third category to cross Rs 100 crore in annualised revenue runrate (ARR), after doubling company also expanded its retail footprint by 20% to over 2.4 lakh FMCG outlets.
Mint
3 days ago
- Business
- Mint
With stellar Q1, Mamaearth parent signals recovery after distribution overhaul
After a challenging year spent overhauling its distribution model, Honasa Consumer Ltd, the parent of Mamaearth, has delivered its highest-ever quarterly revenue and profit. In the June quarter of FY26, Honasa's revenue rose to ₹ 595 crore and net profit to ₹ 41 crore, powered by double-digit growth in its core categories and fatter margins from quick commerce. In Q1, Honasa reported its highest-ever quarterly revenue of ₹ 595 crore and a profit of ₹ 41 crore, with earnings before interest, taxes, depreciation, and amortization (Ebitda) margin improving sequentially to 7.7%. Focus categories, which account for over 80% of its revenue, saw a double-digit year-on-year growth. Honasa's shares closed at ₹ 271on Tuesday. It is trading nearly 50% below its lifetime high of ₹ 547 hit in September last year. The turnaround suggests the worst of last year's post-'Project Neev' slump is behind the company. With focus segments like face cleansers, shampoos, sunscreens, and baby care now contributing over 80% of sales, and offline reach crossing 9,000 stores, Honasa is betting that a sharper category strategy and faster fulfilment channels will keep its momentum intact. The company expanded its offline distribution, increasing reach and visibility and continued to concentrate on select segments within core categories. 'In our offline stores, we aim to protect margins by focusing on carefully chosen categories with strong gross margins. These are selected to be market leaders, while evolving with customer needs, a reflection of our deliberate category strategy.' said Varun Alagh, co-founder and chief executive of Honasa, during a post-earnings call on Tuesday. Mamaearth's sunscreen revenue was ₹ 595 crore, up 7.4% year-on-year and 11.6% sequentially, with growth affected by the early onset of the monsoon. Mamaearth's focus categories products are now available in over 9,000 stores. The size of the sunscreen consumer cohort has risen to more than 50% of the segment. The category is projected to reach ₹ 5,000 crore in India by 2028, said Alagh. The offline channel accounts for about 15% of Honasa's revenue, with distribution across more than 9,000 general trade outlets, including 3,400+ chemist stores, and over 2,500 modern trade outlets., reflecting a wider physical store penetration, alongside its presence in other channels. However, quick commerce is delivering higher margins across all focus categories, including e-commerce. 'This is a very healthy sign, as any transition from other channels to quick commerce will be beneficial for us,' Alagh said. Honasa Consumer has completed a year-long overhaul of its distribution model, shifting from super-stockists to direct distributors under 'Project Neev'. The move has doubled the contribution of direct distributors to 71% from 38% and expanded its network to over 100,000 distributors in FY25. The transition led to operational challenges, strained distributor relationships, and cost the company about ₹ 70 crore in July–September, leading to a quarterly loss. While its Q4FY25 profit fell 17% to ₹ 25 crore, revenue grew 13% to ₹ 533 crore. The company plans to add 50,000 outlets to reach 150,000 direct distribution points next year.
Mint
09-06-2025
- Business
- Mint
Mamaearth's parent got its hands dirty for a distribution overhaul—it's painful, but paying off
Bengaluru: After nearly four painful quarters, Honasa Consumer Ltd's decision to transform its distribution model—from super-stockists to direct distributors, following in the footsteps of consumer goods giants—is starting to bear fruit. The parent company of beauty brand Mamaearth saw revenue contribution from its direct distributors nearly double in the January-March quarter, resulting in a 13% year-on-year revenue growth to ₹533 crore. While Honasa's fourth-quarter profit fell 17% from a year earlier to ₹25 crore, its distribution model reached more than 100,000 distributors in 2024-25, doubling in one year. 'All of this has happened because of the direct distribution transition that we have done. Our direct distributor contribution has gone from 38% to 71%, which is what we had planned for as we ended the year," Varun Alagh, co-founder and chief executive of Honasa, said during a post-earnings call with analysts last month. Mamaearth's distribution model transition was complete, he added. Also read | Why Mamaearth needs to review its offline distribution strategy However, the process, which stretched for about a year, proved cumbersome for some distributors, especially those with piles of unsold products in tier-2 and tier-3 regions where stock moves slowly. 'My ties with Mamaearth ended about four months ago but the process went on for very long. We were hoping it could have happened more smoothly," said a distributor in Maharashtra, asking not to be named. A distributor in Gurugram, who stopped working with Honasa late last year, said the company tried to make the process as easy as possible but the scale of the shift made it difficult. 'I work with large consumer companies so I know the kind of effort it takes to do something like this in offline distribution. I knew it wouldn't be easy," this person added. According to industry experts, Honasa needs to continue working on its relationships with distributors, especially those reporting excessive inventory and delays in replacing damaged and expired stock. 'Offline distribution is not child's play, especially for a consumer-facing brand," said Satish Meena, advisor at market research firm Datum Intelligence. 'To reach scale and efficiency, it's important to develop long-term relationships with distributors, including those you no longer do business with." Also read | Darling to doubtful: The story of Honasa's struggles Honasa's painful path Alagh had warned of such challenges very early on. In May last year, Alagh said the company's revenue would be impacted in the short term as it worked on improving its processes across the value chain. Mamaearth's earlier distribution strategy involved super stockists, a set of intermediaries who would distribute products sourced from the company to sub-stockists and select retailers. However, Alagh said in May last year that dealing with super stockists had resulted in poor-quality sales and a lack of data. So under 'Project Neev', Honasa shifted to a direct distribution model seeking more control. The project's implementation, however, cost the company nearly ₹70 crore in July-September, leading to a quarterly loss of ₹18.5 crore. On the plus side, the distribution overhaul is said to have helped Honasa scale up its younger brands. In the March quarter, Honasa's The Derma Co brand touched ₹100 crore in annualized revenue rate (ARR)—annual projection based on current revenues—in offline trade, which includes general and modern trade. 'This is a healthy sign that the distribution system is able to distribute more brands, as well as (that) the brand is seeing traction in offline, and that will also become one of the levers of growth for the brand in coming years," Alagh said last month. Also read | Honasa to cut inventory holding period for Mamaearth distributors by streamlining supply chain Mamaearth's products are priced lower than The Derma Co's as these target different needs. Mamaearth's face washes, shampoos, etc., are meant for daily use while The Derma Co focuses on special ingredients for skincare. The Derma Co has in fact trotted ahead of Honasa's flagship brand Mamaearth in the offline journey, creating a pipeline for its peers, including Aqualogica and Dr Sheth's, into the general trade channel, according to Meena of Datum Intelligence. 'Mamaearth is banking on its offline strategy, but it's not going to be easy. For offline to work well, distributors and retailers also need to push the product and sell to the customer. It's a different scenario for The Derma Co, where its USP of active ingredients has created decent recall among consumers," said Meena. Also read | Honasa denies distributors' claims of unsold stock, says secondary dues have been cleared An ambitious target The direct distribution model is followed largely by well-cemented consumer goods companies including Hindustan Unilever Ltd and ITC Ltd. Striking valuable partnerships with well-connected distributors in different regions of the country has enabled these firms to solidify their presence beyond tier-1 markets. However, even established companies have had to realign their distribution models. 'Honasa is not the first to go through this pain. History suggests that companies do come back on track, and we are hopeful," investment firm Jefferies said in a note in September. 'In this context, it is useful to note that several large FMCG (fast-moving consumer goods) firms have gone through distribution realignment, despite decades of existence." Alagh said last month that Honasa aimed to add at least 50,000 outlets to its direct distribution or general trade channel, indicating a path for also scaling up Bblunt, the company's hair care products and salon brand, and its teen-focused cosmetics range Staze. 'So we would want to see this number, which is 100,000, to get to 150,000 as we exit the next year, 12 months from now," Alagh said. The Honasa stock is down nearly 41% from its lifetime high of ₹547 per share reached in September. On Monday, the stock inched up 0.94% on NSE to close at ₹323.00.
