Honasa scrip falls on Mamaearth sales dip

Emkay Global has halved parent Honasa's share target price to ₹300

- Sowmya Ramasubramanian

Shares of Honasa Consumer plunged 20% on Monday to drop below its listing price as analysts cut price targets after the company reported a weaker-than-expected financial performance in the September quarter, hurt by slow growth in its flagship brand Mamaearth.

The company, also the parent of brands including Aqualogica and The Derma Co, reported a loss of ₹18.5 crore against a profit of ₹29.4 crore in the year-ago period, while revenue from operations fell to ₹461 crore from ₹496 crore a year earlier.

The recent shift in distribution strategy from super stockists to direct distributors resulted in higher-than-expected costs, Honasa co-founder Varun Alagh said during the Q2 earnings call last week. But it's the slowdown in Mamaearth sales that has left investors wondering what would fuel the next level of growth for the country's largest digital-first beauty and personal care brand.