Honasa Consumer shares rally 20% as Jefferies ups target price on Mamaearth parent post Q2

Honasa Consumer Ltd (Mamaearth) saw its shares rallying 20 per cent in Thursday's trade as solid quarterly numbers by the largest digital-first beauty and personal care company led Jefferies to increase its target price on the stock to Rs 530 from Rs 520 earlier. Jefferies upgraded the earnings per share by 5-6 per cent for Honasa Consumer on strong top line and margin.

The stock hit its 20 per cent upper circuit limit to hit a fresh high of Rs 422.50 on BSE. Jefferies values Honasa Consumer at 6 times September 2025 EV/sales. Honasa Consumer said its top line for the quarter grew 21 per cent YoY to Rs 496 crore and that like-for-like growth from continuing business stood at 24 per cent.  The  sales growth was aided by a 27 per cent YoY jump in volumes, Mamaearth said.

"While there was a growth deceleration from Q1, the management attributed this to ERP changeover and hence, H1 growth of over 35 per cent reflects the true picture. New brands are scaling up well, with Dr Sheth now the fourth brand to cross Rs 150 crore ARR," Jefferies said.

The Honasa Consumer management remains confident of delivering a 30 per cent-plus revenue growth going forward, similar to that in H1FY24. It expects Ebitda margins to keep improving on a YoY basis over the coming years, led by operating leverage and further optimisation of ad-spends.

"Investing behind brands and distribution expansion however remain a key focus area and would see continued investments," Jefferies said.

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