'Mamaearth's gross profitability metrics are very healthy,' says CEO Varun Alagh

Honasa Consumer Pvt Ltd, the parent entity of the skincare brand Mamaearth, plans to scale up its offline presence in India in the coming years, Varun Alagh, co-founder and CEO of the company said.

“Our gross profitability metrics are very healthy. And, if we were to compare it to the listed FMCG peers, we'll probably be in the top five per cent quartile of the set from a gross profitability profile perspective,” Alagh said in a conversation with Udayan Mukherjee, global business editor, Business Today TV.

“I do not think we need any more funding probably for our inorganic ambitions. We might require external capital, but that's something that is not charted out. It depends on the kind of opportunities we get in the market,” Alagh noted.

Mamaearth primarily retailed through D2C, followed by online marketplaces, and later expanded offline. Alagh said a large part of the category transactions is happening in the offline space and every brand needs to be selling at places where their consumers shop. “We are there in almost 40,000 stores, across 100 plus cities now. From an availability perspective, we continue to double down on it,” Alagh asserted.

On acquisitions, the former Hindustan Unilever executive said, “There are only three reasons why we would like to acquire a business. One is if it adds to our India portfolio in terms of either proposition or pricing, or the R&D that has gone behind that mix. Second, if it adds to the portfolio from a geographical perspective, which is where we want to get into a new market. And, in the third possibility, which is where something like a Momspresso - the possibility of acquiring a sort of capability that we might not have today.”

Sharing some insights, Alagh said, Mamaearth was born out of parental stress when the co-founders and husband-wife duo of Varun and Ghazal Alagh were struggling to treat their infant son’s skin condition with products available in the Indian market. The couple was eventually able to meet their requirement by ordering products from outside. Their search for safe, organic products for their baby led them to launch a toxin-free clean label brand for babies in India.

Founded in 2016, Mamaearth became popular in India with its range of toxin-free products such as face washes, shampoos, and hair oils. It competes with Unilever's India unit, Hindustan Unilever, and Procter & Gamble Co in the personal care industry.

Also read: Indian Hotels shares zoom 100% in a year, what's fuelling the rally?

Also read: Dreamfolks announces Q1 results on listing day, posts Rs 13.4 crore profit