Mamaearth shares soar: In early trade today, shares of Mamaearth parent Honasa Consumer surged nearly 10 per cent to hit Rs 474.90 per share on strong performance in the December quarter.

In the third quarter of this fiscal year, the company’s net profit tripled from the previous year to 260 million rupees.

Its consolidated revenue grew 28% to Rs 488 crore. But slowing consumer demand has continued to impact numbers. Compared with the September quarter, revenue fell 1.5% and profits fell 12%.

Its net profit rose sevenfold to Rs 80 crore in the first nine months of this fiscal year.

Its consolidated revenue surged 28% year-on-year to Rs 4.88 billion in the December quarter. Additionally, consolidated EBITDA experienced significant growth, surging 192% year-on-year to Rs 345 million, an increase of 397 basis points.

The company launched 122 new products (NPDs) in its 23rd year, which has contributed significantly to its revenue growth, with NPD accounting for an impressive proportion of its year-to-date revenue.

In its earnings report, the company said key campaigns such as “Beautiful Ho Tum” and product-specific initiatives for rosemary and color care have significantly enhanced its performance, supported by eye-catching visuals and high viewership. Brand influence.

JPMorgan analysts downgraded the stock to “underweight” with a target price of 390 rupees per share, 10% lower than the last closing price.

“We see downside risks to the company’s growth expectations and have revised down FY25/26 EPS by 4/6%. While higher revenue helped drive Honasa Consumer’s financials in Q3, their revenue and EBITDA numbers were low above our expectations. Furthermore, management sounded cautious amid heightened competitive intensity and weak demand,” the brokerage said in a post-earnings review report.

Honasa’s total expenses for the quarter were 464.5 billion rupees, up from 3785 million rupees a year ago and 463.9 billion rupees in the previous quarter.

The company launched 122 new products in 2023 and expanded its omni-channel distribution to more than 170,000 touch points. Its distribution network grew 37% year-on-year.

Honasa Consumer shares have fallen over 6% in the past month, while the benchmark Sensex has fallen 1%.

Honasa Consumer stock hit an all-time high of Rs 510 per share on January 23, 2024.

JPMorgan analysts believe the stock’s FY25/26 price-to-earnings (PE) ratio of 99x/70x is high in terms of valuation.

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