Honasa Q2: CLSA retains 'Hold' call, check target price post Q2 earnings
Honasa Consumer reported sales growth of 35.9% YoY in Q2 FY27, slightly ahead of the growth indicated in its business update. Ebitda increased 95% YoY, with its margin expanding 385 basis points to 12.7%.
- Nov 9, 2026,
- Updated Nov 9, 2026 4:56 PM IST
Brokerage CLSA has raised its target price on Honasa Consumer Ltd to Rs 506 from Rs 505 earlier, while maintaining its 'Hold' rating on the stock following the company's September quarter results. The brokerage said the company's sales grew 36% year-on-year (YoY), while Ebitda increased 95%, supported by stronger growth across brands and sales channels. It also highlighted improving margins and better-than-expected operating performance.
Honasa Consumer reported sales growth of 35.9% YoY in Q2 FY27, slightly ahead of the growth indicated in its business update. Ebitda increased 95% YoY, with its margin expanding 385 basis points to 12.7%. The company's Ebitda was 8% above CLSA's estimates and 16% higher than consensus expectations. However, the margin remained 60 basis points below the brokerage's estimate, largely due to a gross margin shortfall of 36 basis points.
Honasa Consumer shares closed 3% higher at Rs 483.60 on Monday, compared with their previous close of Rs 469.70. The stock opened at Rs 484.50 and touched a high of Rs 494.25 during the session.
Growth broadens across brands and channels
CLSA said the company's focus categories recorded growth of more than 40% and contributed over 80% of sales. Mamaearth maintained growth in the high-teens range, while the younger brands in the portfolio accelerated to 45% YoY growth.
The brokerage also noted that growth was spread across sales channels. General trade secondary sales and modern trade (MT) offtake increased more than 40%, while e-commerce recorded 20% growth. Honasa's offline distribution network continued to expand, with general trade reach increasing 26% YoY to around 3.2 lakh outlets and average secondary sales per retailer rising more than 30%.
The company also continued to expand its offline presence through its salon and beauty businesses. The Derma Co's offline reach crossed 65,000 outlets, while its younger brands recorded growth of more than 40%.
CLSA raises target price marginally
CLSA increased its FY27-FY29 estimates by 2% following the better-than-expected sales growth and Ebitda performance. The brokerage said the upward revision in its estimates reflected a 4% increase in its top-line forecasts, partly offset by slightly lower margin assumptions.
It expects Honasa Consumer to achieve an Ebitda margin of 15.2% in FY30, compared with management's FY31 guidance of 15%. CLSA raised its target price marginally to Rs 506 from Rs 505 and maintained its 'Hold' rating. The brokerage's valuation is based on its revised earnings estimates, while its report cited a reference share price of Rs 465.75 as of November 6, 2026.
Brokerage CLSA has raised its target price on Honasa Consumer Ltd to Rs 506 from Rs 505 earlier, while maintaining its 'Hold' rating on the stock following the company's September quarter results. The brokerage said the company's sales grew 36% year-on-year (YoY), while Ebitda increased 95%, supported by stronger growth across brands and sales channels. It also highlighted improving margins and better-than-expected operating performance.
Honasa Consumer reported sales growth of 35.9% YoY in Q2 FY27, slightly ahead of the growth indicated in its business update. Ebitda increased 95% YoY, with its margin expanding 385 basis points to 12.7%. The company's Ebitda was 8% above CLSA's estimates and 16% higher than consensus expectations. However, the margin remained 60 basis points below the brokerage's estimate, largely due to a gross margin shortfall of 36 basis points.
Honasa Consumer shares closed 3% higher at Rs 483.60 on Monday, compared with their previous close of Rs 469.70. The stock opened at Rs 484.50 and touched a high of Rs 494.25 during the session.
Growth broadens across brands and channels
CLSA said the company's focus categories recorded growth of more than 40% and contributed over 80% of sales. Mamaearth maintained growth in the high-teens range, while the younger brands in the portfolio accelerated to 45% YoY growth.
The brokerage also noted that growth was spread across sales channels. General trade secondary sales and modern trade (MT) offtake increased more than 40%, while e-commerce recorded 20% growth. Honasa's offline distribution network continued to expand, with general trade reach increasing 26% YoY to around 3.2 lakh outlets and average secondary sales per retailer rising more than 30%.
The company also continued to expand its offline presence through its salon and beauty businesses. The Derma Co's offline reach crossed 65,000 outlets, while its younger brands recorded growth of more than 40%.
CLSA raises target price marginally
CLSA increased its FY27-FY29 estimates by 2% following the better-than-expected sales growth and Ebitda performance. The brokerage said the upward revision in its estimates reflected a 4% increase in its top-line forecasts, partly offset by slightly lower margin assumptions.
It expects Honasa Consumer to achieve an Ebitda margin of 15.2% in FY30, compared with management's FY31 guidance of 15%. CLSA raised its target price marginally to Rs 506 from Rs 505 and maintained its 'Hold' rating. The brokerage's valuation is based on its revised earnings estimates, while its report cited a reference share price of Rs 465.75 as of November 6, 2026.