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Mint
7 hours ago
- 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.
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Business Standard
23-05-2025
- Business
- Business Standard
Honasa Consumer targets double-digit revenue growth, eyes Mamaearth revival
India's Honasa Consumer, which owns beauty brands including BBlunt, is deepening its push into neighbourhood stores to drive double-digit revenue growth this fiscal, while also looking to revive its flagship Mamaearth brand, a top executive told Reuters. The company, which currently serves more than 100,000 stores directly, plans to expand to another 50,000 stores in the current financial year that started on April 1, CEO and Co-founder Varun Alagh said late on Thursday. Alagh expects brick-and-mortar growth, combined with growth in newer skincare brands Aqualogica and Dr. Sheth's, and a turnaround of Mamaearth, to drive revenue growth in the double-digit percentage range. Honasa, which began as a direct-to-consumer baby care products startup in 2016, also owns beauty brands including Derma Co. Analysts expect Honasa's revenue to jump 15% year-on-year to 23.71 billion rupees ($276.1 million) this fiscal, according to data compiled by LSEG. However, Alagh declined to say whether the company would exceed the forecast. Honasa's forecast comes months after it came under fire for allegedly dumping excessive stock on Indian distributors without considering demand, a claim that the company has denied. Alagh also declined to say when Mamaearth would return to growth, though he noted that Honasa would double down on its "focus categories" including face wash, shampoo, moisturizers, and sunscreen to revive the brand. Honasa said last year that Mamaearth's growth had lagged its own expectations for the last few quarters due to shifting consumer preferences, with the company noting that it needed to refresh its products, price and marketing. Honasa's revenue rose 8% to 20.67 billion rupees for the financial year ended March 31, but this trailed a 13% growth in volumes as a larger share of sales came through third-party stores that bring in less money per product. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Time of India
23-05-2025
- Business
- Time of India
Honasa Consumer shares skyrocket 12% on reporting 13% YoY revenue growth in Q4
Shares of Honasa Consumer , the parent company of Mamaearth , shot up 12% in Friday's early trade to their day's high of Rs 308.60 on the BSE after the revenue from operations rose 13% year-on-year (YoY) to Rs 534 crore from Rs 471 crore in the corresponding quarter of the previous financial year. However, the company reported an 18% YoY decline in consolidated net profit to Rs 25 crore in Q4FY25, compared to Rs 30 crore in the same period last 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. Gross profit margin improved to 70.7% in Q4 FY25, up 76 bps YoY, driven by an improved product mix and operational efficiencies. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories 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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Business Standard
23-05-2025
- Business
- Business Standard
Honasa Consumer shares fly 14% on Q4 results; check details here
Honasa Consumer share price: Honasa Consumer shares were in demand on the last trading day of week i.e. Friday, May 23, 2025, with the scrip surging up to 14.06 per cent to hit an intraday high of ₹314.20 per share. At 10:01 AM, Honasa Consumer share price was trading 12.29 per cent higher at ₹309.30 per share. In comparison, BSE Sensex was trading 0.66 per cent higher at 81,483.49 level. Catch Stock Market Latest Updates Today LIVE What sparked the rally in Honasa Consumer share price? Honasa Consumer share price rose on the back of healthy March quarter of financial year (Q4FY25) results. The company reported a revenue of ₹534 crore, reflecting a 13.3 per cent year-on-year (Y-o-Y) growth—outpacing the broader FMCG market. The robust top-line performance was supported by solid execution and a continued focus on growth across channels, Honasa Consumer said in a statement. Profitability also improved during the quarter, with a profit after tax (PAT) of ₹25 crore and an Ebitda margin of 5.1 per cent. Additionally, the gross profit margin rose to 70.7 per cent, up by 76 basis points Y-o-Y. These gains were attributed to a favourable product mix and operational efficiencies, showcasing the company's ability to scale profitably. Mamaearth, one of Honasa's flagship brands, demonstrated the early success of its strategic shift. It achieved double-digit growth across key categories in e-commerce and modern trade channels. This growth was fueled by a focus on building category leadership, optimising media investment, and increasing brand awareness. According to NielsenIQ, Mamaearth also gained market share, entered the Top 5 in the face wash category, and expanded its retail footprint by 26 per cent Y-o-Y to 2.36 lakh outlets. Honasa's newer brands continued to perform strongly, registering over 30 per cent Y-o-Y growth in FY25. Among them, The Derma Co. reached a major milestone, hitting a ₹100 crore annualised run rate in offline channels, while maintaining leadership on major online platforms. The company's distribution network also saw major improvements. Honasa adopted a direct distribution-led approach, which helped bill over 1 lakh unique outlets in FY25. The contribution of direct distributors surged from 38 per cent in FY24 to 71 per cent in Q4FY25. This strategic shift not only enhanced reach but also improved overall operational efficiency, contributing further to the market's positive response. '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, Honasa Consumer. ALSO READ | About Honasa Consumer Honasa Consumer Limited (HCL), formerly known as Honasa Consumer Private Limited, is a digital-first beauty and psonal care company that operates under a "house of brands" model. The company has built a strong reputation for offering products rooted in natural ingredients and safe formulations, catering to the evolving needs of health-conscious consumers. With a strategic focus on sustainability and wellness, HCL delivers a wide range of offerings across skincare, haircare, and personal care categories. A core strength of HCL lies in its digital-first approach. Leveraging technology and data-driven insights, the company stressed upon a direct-to-consumer (D2C) strategy to engage with customers more effectively. Its brand portfolio includes well-known names such as Mamaearth (baby and personal care), The Derma Co. (skincare), Aqualogica, Dr. Sheth's, BBlunt, and Staze Beauty.
Reuters
23-05-2025
- Business
- Reuters
India's Honasa targets double-digit revenue growth on retail push, eyes Mamaearth revival
May 23 (Reuters) - India's Honasa Consumer ( opens new tab, which owns beauty brands including BBlunt, is deepening its push into neighbourhood stores to drive double-digit revenue growth this fiscal, while also looking to revive its flagship Mamaearth brand, a top executive told Reuters. The company, which currently serves more than 100,000 stores directly, plans to expand to another 50,000 stores in the current financial year that started on April 1, CEO and Co-founder Varun Alagh said late on Thursday. Alagh expects brick-and-mortar growth, combined with growth in newer skincare brands Aqualogica and Dr. Sheth's, and a turnaround of Mamaearth, to drive revenue growth in the double-digit percentage range. Honasa, which began as a direct-to-consumer baby care products startup in 2016, also owns beauty brands including Derma Co. Analysts expect Honasa's revenue to jump 15% year-on-year to 23.71 billion rupees ($276.1 million) this fiscal, according to data compiled by LSEG. However, Alagh declined to say whether the company would exceed the forecast. Honasa's forecast comes months after it came under fire for allegedly dumping excessive stock on Indian distributors without considering demand, a claim that the company has denied. Alagh also declined to say when Mamaearth would return to growth, though he noted that Honasa would double down on its "focus categories" including face wash, shampoo, moisturizers, and sunscreen to revive the brand. Honasa said last year that Mamaearth's growth had lagged its own expectations for the last few quarters due to shifting consumer preferences, with the company noting that it needed to refresh its products, price and marketing. Honasa's revenue rose 8% to 20.67 billion rupees for the financial year ended March 31, but this trailed a 13% growth in volumes as a larger share of sales came through third-party stores that bring in less money per product. ($1 = 85.8900 Indian rupees)
