Mamaearth parent Honasa Consumer slips into red in Q2, revenue down 7%

Honasa Consumer Ltd, the parent company of Mamaearth, on Thursday reported a net loss of Rs 18.5 crore for the second quarter (Q2) of financial year 2024-25 (FY25), a decline from the record Rs 40.2 crore profit in the previous quarter, according to regulatory filings.

 

The company, which also operates direct-to-consumer (D2C) brands such as The Derma Co and BBlunt, had posted a profit of Rs 29.4 crore in the year-ago period.

 

The decline was attributed to the company’s ongoing transition to a D2C model under “Project Neev”, which has necessitated an inventory correction of Rs 63 crore.

 

 

“This transition has impacted our revenue and profits, leading to a slowdown for Mamaearth. However, this realignment will also strengthen our offline go-to-market (GTM) strategy in the quarters ahead, setting the stage for our next phase of growth,” said Varun Alagh, chairman and chief executive officer, Honasa Consumer Ltd.

 

“For us, strengthening our offline GTM capabilities and bringing Mamaearth back onto a strong growth trajectory are our top priorities,” he added.

 

The company’s consolidated revenue from operations declined seven per cent Y-o-Y to Rs 461.8 crore in Q2, from Rs 496.1 crore a year ago and Rs 554.1 crore in Q1 FY25.

 

The Gurugram-based firm's total expenses in Q2 stood at Rs 506.2 crore, up from Rs 464 crore a year ago but down from Rs 520.4 crore in the previous quarter.

 

Meanwhile, the company’s younger brands like The Derma Co, Aqualogica, BBlunt, and Dr Sheth’s achieved more than 30 per cent year-on-year (Y-o-Y) growth in the first half of the year (H1).

 

“In core categories like sunscreens, face washes, and serums, our growth in H1 is more than 28 per cent. We are constantly learning and evolving to meet the changing needs of Indian consumers,” Alagh added.

 

These core categories are currently driving nearly 50 per cent of the firm’s business. Honasa aims to grow these categories and become either the market leader or be in the top three nationally in the next 3-5 years, the company said.

 

Honasa also stated that its retail offtake continued to outpace the competition. In offline sales, Mamaearth face washes and Mamaearth shampoos gained 125 basis points (bps) of value market share year-on-year (Y-o-Y) as of September 2024, it said.