The revenue from operations stood at Rs 462 crore which was down by 7% over Rs 496 crore posted by the Mamaearth brand operator in the corresponding quarter of the previous financial year.
“Over the past few months, we’ve been implementing Project Neev to optimise our distribution model. In this quarter, we have taken strategic steps towards transitioning from super-stockists to direct distributors in top 50 cities. This transition has impacted our revenue and profits, leading to a slowdown for Mamaearth,” said Varun Alagh, Chairman and CEO of Honasa Consumer.
The stock had ended at Rs 378 on the NSE on Thursday, up by Rs 13.75 or 3.77%. On Friday the markets were closed on account of Guru Nanak Jayanti.
The company’s revenue figures were also down on a quarter-on-quarter basis while the net loss in the July-September quarter was also on a QoQ basis. In the previous quarter, Honasa Consumer had reported a net profit of Rs 40.25 crore while its topline stood at Rs 554 crore which was a 17% decline.
In its filing to the exchanges, the company said that the revenue adjusted for inventory correction was Rs 525 crore with a growth rate of 5.7% YoY.
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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%.Revenue growth, adjusted for inventory correction, in H1FY25 stood at 12.3%, which is much faster than the competition, driving market share gains, the company filing said.
Younger brands like The Derma Co., Aqualogica, BBlunt, and Dr. Sheth’s achieved more than 30% YTD growth in both quarters of the year.
Focus categories like face washes, sunscreens and face serums are growing at 28%+ (YoY growth in H1, adjusted for inventory correction) and continuously gaining market share, the company claimed. “They currently drive nearly 50% of the business. Our ambition is to grow these categories and become either the market leaders or be in the top 3 nationally in the next 3-5 years,” it said.
However, Alagh said that the company’s realignment through Neev will also strengthen offline go-to-market (GTM) strategy in the quarters ahead, setting the stage for its next phase of growth. “For us, strengthening our offline GTM capabilities and bringing Mamaearth back on the strong growth trajectory are our top priorities,” he added.
Retail offtake continues to be ahead of the competition, Honasa said, adding that in offline, Mamaearth face washes as well as Mamaearth shampoos gained 125 bps of value market-share YoY as of September 2024 (as per NielsenIQ).
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