Mamaearth shares fall over 6% post Q1 results. Should you buy or sell?
Honasa Consumer fell over 6% to Rs 444 in Monday's trade on the BSE, despite the company reporting a 63% year-on-year (YoY) increase in consolidated net profit for the June quarter of FY25, rising to Rs 40 crore from Rs 24 crore in the same quarter last year.
The company's revenue from operations for the June quarter surged 19% year-on-year (YoY) to Rs 554 crore, up from Rs 466 crore in the same period last year.
Honasa registered product business growth of 20.3% with an underlying volume growth (UVG) of 25.2%.
The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expanded by 201 basis points year-on-year (YoY) to 8.3%, resulting in an EBITDA of Rs 46 crore.
The operator of the Mamaearth brand attributed its strong performance to improved gross profit margins and scale-led efficiencies.
Should you buy, sell, or hold Hosana Consumer's stock? Here's what analysts say:
Jefferies
Jefferies maintained a 'Buy' rating on Honasa but reduced the target price to Rs 545 from Rs 590.
While Q1 performance exceeded forecasts, it missed revenue growth expectations. Key concerns include high competition and potential inventory corrections. The medium-term guidance suggests 20% revenue growth and 150 basis points margin expansion. Jefferies expects ongoing volatility, given that Honasa is still in its early stages of evolution.
Emkay
Emkay maintained its 'Buy' rating on Honasa Consumer with a target price of Rs 525.
Factoring in the corrective actions in offline trade for right-sizing the
