Honasa Consumer Stock Surges 4% Following Record Q1 Results as Jefferies and Emkay Project Significant Growth Ahead.
Honasa Consumer, the parent company of Mamaearth, has reported exceptional financial results for the first quarter of FY27, leading to a robust 4% gain in its share price to Rs 501 on the BSE. The company achieved its highest-ever consolidated profit after tax (PAT) of Rs 90 crore, marking a substantial year-on-year increase of 116.5%. Revenue from operations also reached a record Rs 756 crore, representing a 27% increase from Rs 595 crore in Q1FY26. This impressive performance is complemented by a noteworthy rise in EBITDA, which surged 140.7% YoY to Rs 110 crore, with the EBITDA margin expanding from 7.7% to 14.6%, reflecting operational efficiency improvements and strategic positioning in a competitive market.
Market analysts remain optimistic about Honasa Consumer’s growth trajectory, with Jefferies maintaining a Buy rating and a target price of Rs 650, suggesting a 39% upside potential. The brokerage emphasizes that the company is consistently exceeding earnings expectations, with projections indicating further improvements in profit margins by 150-200 basis points (bps) in FY27. Additionally, the company’s management has signaled a commitment to ongoing investment and innovation, although concerns regarding higher crude oil and packaging costs may pose challenges in the short term. Nevertheless, planned price hikes are expected to mitigate these cost pressures, and upcoming changes in Flipkart’s policy may further influence revenue dynamics in the second quarter.
Emkay has also reiterated its Buy rating, raising the target price to Rs 550, implying a 14% upside from the previous target. The brokerage anticipates sustained growth in sales, projecting a compound annual growth rate (CAGR) of 17% in revenue and 25% in earnings over FY26-29E. This optimistic outlook is supported by a forecasted margin expansion of 330 bps driven by operational leverage, indicating a solid growth pipeline. Furthermore, the launch of the FIKN brand within the fragrance category could yield additional revenue streams, aligning with the broader strategy aimed at enhancing market share across multiple segments.
In summary, with management underscoring significant growth in focus categories and diversified demand across various sales channels, Honasa Consumer’s strategic initiatives appear to be effectively translating into tangible financial results. The ongoing momentum, alongside a clear commitment to innovation and strong cost management, positions the company favorably for sustained performance in an expanding market landscape. Investors are encouraged to consider these dynamics in their assessment of Honasa Consumer as a long-term growth opportunity.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)