Honasa Consumer gains 3% after solid Q3, but stock still trades below IPO price

Shares of Honasa Consumer, the parent of Mamaearth, gained over 3% on Friday, February 13, after reporting its strongest quarter in recent periods, marking the third consecutive quarter of improved performance with record revenue and margins.

The company posted a 16% YoY rise in revenue to ₹601.5 crore. Adjusted for the Flipkart settlement, sales growth stood at 21%.

EBITDA surged 151% to ₹65.5 crore from ₹26 crore a year ago, with margins expanding to 10.9% from 5%. Net profit doubled to ₹50 crore.

Like-for-like revenue growth came in at 21.3%, aided by the Flipkart settlement, while underlying volume growth was robust at 30.2%.

Mamaearth reported double-digit growth, and younger brands grew over 25%. The Derma Co also delivered double-digit EBITDA growth.

Distribution expanded meaningfully, with direct outlet coverage crossing 1 lakh outlets and total distribution rising over 25% YoY to 2.7 lakh outlets.

Brokerage reactions

HSBC retains a 'Reduce' rating with a price target of ₹260. It said Q3 results were robust, with a 30% EBITDA beat and Mamaearth posting growth in the teens, albeit on a low base.

HSBC raised its EBITDA margin estimates, leading to a 7-18% increase in FY26-28 EPS forecasts, but cautioned that while margin improvement is impressive, consistent growth delivery remains key.

Jefferies remains positive with a 'Buy' rating and a price target of ₹500. It said that Mamaearth delivered double-digit growth, while younger brands grew nearly twice as fast, alongside margin expansion.

Management commentary was constructive on both growth and profitability.

Jefferies said that although Honasa's journey has been bumpy, the company is steadily regaining momentum, which could help rebuild investor confidence. It has sharply raised its earnings estimates following the quarter.

Despite the rally, the stock remains below its IPO price of ₹324.