Mamaearth parent Honasa Consumer dazzles as skincare, DermaCo drive FY24 profit
Honasa Consumer, the parent of Mamaearth, is shifting from a super stockist distribution model to expedite its omnichannel plans, tapping on a multi-brand strategy to capture market share.
Honasa Consumer, the parent company of , reported an annual consolidated profit of Rs 111 crore in FY24, driven by strong demand for beauty and skincare products, particularly from its DermaCo range, facilitated by its multi-brand strategy.
The direct-to-consumer (D2C) company, which counts brands like , , , and in its portfolio, recorded nearly 22% growth in revenue from operation during the financial year ended March 31, 2024. It reported a revenue from operations of Rs 1,919.9 crore in the year.
Mamaearth, which went public in November last year, reported earnings before interest, tax, amortisation, and depreciation (EBITDA) margin of 7.1% in FY24, higher than the 1.5% reported a year ago helped by operational efficiencies.
For Q4 FY24, Honasa logged a sequentially higher consolidated profit of Rs 30.4 crore and a revenue of Rs 471 crore.
Shares of the company closed 1.76% lower trading at Rs 419 apiece on NSE today.
The company also announced Rs 500 crore annual recurring revenue (ARR) for its science-backed skincare range, DermaCo, which is expected to attain a scale of Rs 1,000 crore by 2029. Net sales value ARR in terms of GMV for the brand is closer to Rs 900 crore.
Mamaearth, which manufactures beauty and personal care products like shampoos, sunscreens, lotions, and lip balms, competes with industry giants like L'oreal, Lakme, and Nivea.
It had previously employed a strategy of bolstering its portfolio with fresh, innovative products to expand its market presence, with new offerings accounting for about 18% of annual revenue in FY24.
It uses its house of brands strategy to dominate categories, as customers flock to the same parent for different kinds of value propositions in the same category.
“Leveraging the power of our House of Brands strategy, we are committed to establishing our dominance in swiftly evolving sectors like sunscreens. Throughout the calendar year [20]23, we introduced 122 new products (NPDs),” the company said in a statement.
To ramp up its R&D efforts, Honasa announced the purchase of Cosmogensis Cosmetics Labs for its scientific expertise, R&D lab, and manufacturing capability for Rs 4 crore. Honasa expects the deal to close in the next 4-6 weeks.
The company further plans to ramp up its omnichannel strategies, as it saw offline sales accounting for one-third of total sales during the year.
It is shifting from a super stockist distribution model to direct distributors, beginning with the top 50 Indian cities in response to quality and efficiency issues within the current infrastructure.
(The copy was updated to reflect Q4 numbers.)
Edited by Suman Singh