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This rally came after the stock had been under significant pressure. Honasa’s share price had fallen nearly 40% over the past month and more than 50% in the last three months. It also dropped below its IPO price of Rs 324 earlier this month.
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The sharp selloff was triggered by Honasa’s first quarterly loss since its November 2023 listing.
For the September quarter of FY25, Honasa reported a net loss of Rs 19 crore, a sharp contrast to a profit of Rs 29 crore in the same period last year. Revenues fell 7% year-on-year to Rs 462 crore, impacted by sluggish demand, a one-time inventory correction of Rs 630 crore, and pressures on its direct-to-consumer (D2C) model.
The company’s revenue also declined on a quarter-on-quarter basis, with the net loss widening compared to the previous quarter. In Q1 FY25, Honasa had posted a net profit of Rs 40.25 crore, with revenues at Rs 554 crore, down 17% from the prior quarter.
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The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) margin was reported for Q2FY25 at 6.6%, with EBITDA margin adjusted for inventory correction at 4.1%.
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In technical terms, the relative strength index (RSI) of the stock is currently at 14.9, signalling the stock is trading in the oversold territory. Additionally, the MACD is at -38.7, which is below its Signal and Center Line, this is a strong bearish indicator.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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