Mamaearth parent's Q4 profit shrinks as inventory correction casts a long shadow

Honasa Consumer, the parent company of Mamaearth, saw its bottomline squeeze in the March quarter, even as its revenue grew by 13% over last year, according to the filings made with the exchange.

It earned Rs 533.5 crore in revenue from operations during the quarter. Compared to the December quarter, its sales grew by only Rs 16 crore.

The Varun Alagh- and Ghazal Alagh-led company also saw its profit narrow by 18% to Rs 24.9 crore from Rs 30.4 crore reported in the corresponding quarter in the previous year. Even on a quarter-over-quarter basis, it clocked a marginal de-growth from Rs 26 crore in the December quarter.

During the January-March 2025 quarter, Honasa Consumer, which is also the parent company of popular brands like The Derma Co, Aqualogica, Dr Sheth’s, and BBlunt, posted an EBITDA margin of 5.1% helped by improvements in product mix and operational efficiencies.

During the same period, its expenses rose by 15.8% YoY to Rs 522 crore, mainly hurt by a spike inventory correction plan undertaken in the second quarter of the year.

Under Project Neev, Honasa Consumer aimed to streamline its distribution network by removing the two-layered channel partner structure, which included super-stockists and sub-distributors in the top 50 cities. This transition was meant to simplify operations and improve efficiency by switching to a single-layered distributor structure.

The BBlunt parent says it has already started seeing upsides from its inventory correction project. Its direct distribution has now reached over 102,000 outlets, which used to be at about 45,000 to 50,000. Moreover, its direct contribution has gone from 38% to 71% by the end of the year.

Besides its flagship brand Mamaearth, Honasa saw its new beauty bets with Aqualogica, Dr Sheth's and BBlunt yield results, with younger brands clocking 30% growth during the year.

"Our newer brands have also maintained a strong trajectory, growing over 30% YoY in FY25. Notably, The Derma Co. has now crossed Rs 100 Cr ARR from offline channels while continuing to lead across top online platforms," shared Varun Alagh, Chairman, CEO and Co-founder, Honasa Consumer in a press note.

The company is looking to focus on a few big categories namely, face wash, shampoo, sunscreen, moisturizer, and baby.

"We also changed our investment allocation mix towards these and deployed a better media mix, which is more effective. I'm happy to share that we're already seeing early green shoots from this change in strategy. These focus categories contribute to about 70% of the brand," shared Alagh in a post-earnings call.

On an annual basis, Honasa Consumer clocked Rs 1,865 crore in turnover, a marginal 5.7% improvement from Rs 1,764 crore it made in the year ended March 2024. Its profit for FY25 nearly halved to Rs 64 crore from Rs 121 crore a year earlier.

Shares of the company closed the day at Rs 275.06, or 1.7% higher, on the NSE.

The omnichannel player recently appointed Karan Bajwa as CHRO and Avinash Dhagat as supply chain head. Earlier this year, its chief business officer Zairus Master resigned from his role citing personal reasons.

During the quarter, the company granted 24.16 lakh stock options under its Employee Stock Option Plan (ESOP)- 2018.

(The copy was updated with post-earnings call quotes.)