What should investors do with Honasa stock? Hemang Jani answers
«But the way these numbers have been announced after giving the guidance, clearly there is a case of credibility issue to my mind. And the business model, we can all attribute this to the distribution channel, the disruption by Q-commerce, and many more things,» says Hemang Jani, Independent Market Expert.
Does the stock deserve to fall by 20%? I mean, okay, numbers are bad, but they are not terrible.
Hemang Jani: So, the way the market has reacted, which means that there is a larger concern on the credibility of the numbers that the management has been giving and more so after delivering a very good growth in the last two quarters.
Typically, for consumer companies you would not see this kind of major gaps versus expectations. Yes, I can understand that versus a certain growth that the market is expecting if there is a certain bit of disappointment, which has been the case with many consumer companies in this quarter.
But the way these numbers have been announced after giving the guidance, clearly there is a case of credibility issue to my mind. And the business model, we can all attribute this to the distribution channel, the disruption by Q-commerce, and many more things.
But at the end of the day, the company was getting a certain valuation and in the new scenario, current numbers and the outlook by the management, market will take a lot of time to kind of digest this kind of an accident. So, I would certainly think that there is a case for a significant de-rating as far as Honasa is concerned.
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