Honasa Consumer Limited — Q2 FY26 earnings call

Call held 12 Nov 2025

Management summary

Honasa Consumer reported a strong Q2 FY26, with like-for-like revenue growing 22.5% and gross profit reaching an all-time high of 71.9%. EBITDA remained stable at 8.4%, translating to ₹48 crores. Mamaearth returned to growth, and young brands continued their strong performance. The company also expanded its general trade distribution and launched a new prestige skincare brand, Lumineve, while making a strategic investment in the oral beauty segment.

Highlights

  • Like-for-like revenue grew 22.5% to ₹566 crores in Q2 FY26, demonstrating strong top-line performance.

  • Gross profit reached an all-time high of 71.9%, indicating improved cost efficiencies and product mix.

  • EBITDA remained stable at 8.4% (₹48 crores), with PAT at ₹39 crores, reflecting healthy profitability.

  • Mamaearth has returned to green growth, and the young brands portfolio (BBlunt, Aqualogica, Dr. Sheth's, Staze) achieved 20% Y-o-Y growth.

  • General trade distribution saw a 35% Y-o-Y increase in direct outlet billings, with 80% of business now coming from direct distributors, strengthening market reach.

Concerns

  • A change in Flipkart's settlement process led to a ₹28 crores revenue recognition impact in Q2 FY26, though management stated it had no effect on absolute profitability.

Key financials

  1. Revenue (Like-for-like) ₹566 Cr +22.5%YoY
  2. Revenue (Reported) ₹538 Cr
  3. Gross Profit 71.9%
  4. EBITDA ₹48 Cr
  5. EBITDA Margin 8.4%
  6. PAT ₹39 Cr
  7. UVG 16.7%

What they filed

Q1 FY27: revenue up 19.2%, net profit up 110.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue417 505 523 584 527 +26%587 +16%608 +16%696 +19%
EBITDA-30 22 24 42 44 +247%61 +177%68 +183%100 +138%
Net profit-15 25 25 40 38 +353%48 +92%64 +156%84 +110%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • M&A Fang Acquisition · Announced

    Participate in the oral beauty segment by funding early-stage brands and taking a significant minority stake, aiming to build Fang into a prestige leader in oral care.

    And that's the opportunity that we are looking at participating in by funding brands like Fang, which are at early stage level and taking a significant minority, helping the founders build the brand into something extremely meaningful. And we see Fang to be clearly one of those brands which can become a prestige leader in the country from a oral care perspective.

Guidance & targets

Volume

  • Mamaearth growth Volume · Q3 FY26, Q4 FY26, FY27 · High confidence high single-digit growth in next quarter, double-digit growth by Q4 FY26, maintain double-digit growth next year
    Yes. So from a going forward, I think the first objective is that a high single-digit growth in next quarter and the objective to touch, getting to double-digit growth by Q4 and then try to maintain that as we get into next year.

    — Varun Alagh

Market Share

  • Core categories contribution to total Market Share · next 4 to 6 quarters · High confidence 84% to 85%

    From 75% today

    And from a 70% contribution last year, the core categories are already contributing 75%. And that was of the plan that over the next 4 to 6 quarters, we intend to take this number itself to 84% to 85%, which will lead to strong share ownerships within these categories as well.

    — Varun Alagh

Margin

  • EBITDA margin Margin · coming quarters · High confidence at least 7% range
    We believe that we will now stay at least at this range even in the coming quarters.

    — Varun Alagh

  • Operating margin profile improvement Margin · every year · High confidence 50 to 100 bps
    And we've indicated that every year, we target to unlock 50 to 100 bps of operating margin profile, which will be a mix of all these initiatives.

    — Raman Sohi

Revenue

  • Mamaearth net sales ARR Revenue · future · Medium confidence ₹1,500 crores, then ₹2,000 crores
    And once the brand reaches even stronger scale, let's say, the next milestone is INR1,500 crores, then there is INR2,000 crores and even the profitability further significantly improves.

    — Varun Alagh

  • Derma Co net sales ARR Revenue · next 1, 2 years · Medium confidence ₹1,000 crores plus
    While we continue to strengthen our position in the core categories of face wash, face serum, and sunscreen, the brand is now looking to build moisturizer and shampoo as categories as it gets in the stage to get to INR1,000 crores plus kind of a brand over the next 1, 2 years, which is how we see the brand shaping up as we move forward.

    — Varun Alagh

ESG

  • Trees planted ESG · next 5 years · High confidence 1 million additional trees
    And we have taken a goal to plant another 1 million trees over the next 5 years and which we are very confident that we'll achieve.

    — Varun Alagh

Market Size

  • Oral beauty market opportunity Market Size · by 2030 · High confidence $700 million
    And it will be a play that can happen in beauty and personal care. And it's not a small market, we believe this to be a $700 million opportunity by 2030 with the premiumization and rise in aesthetic consciousness.

    — Varun Alagh

  • Prestige skin care market opportunity Market Size · next decade · High confidence $4 billion
    We believe over the next decade, prestige skin care itself will be like a $4 billion opportunity.

    — Varun Alagh

What to watch in Q3 FY26

Mamaearth double-digit growth

by Q4 FY26
Current High single-digit growth
Target Double-digit growth

Why it matters

Achieving double-digit growth for Mamaearth is a key objective for the company's overall growth trajectory.

Yes. So from a going forward, I think the first objective is that a high single-digit growth in next quarter and the objective to touch, getting to double-digit growth by Q4 and then try to maintain that as we get into next year.

Risks & concerns

  • Supply chain complexity for Staze

    medium

    The Staze brand, being shade-based, involves a complex supply chain with some reliance on China for packaging and conversion, which has been a learning curve for the company.

    Management acknowledged

  • Flipkart revenue recognition change

    low

    A change in Flipkart's settlement process reduced reported revenue by ₹28 crores, but management clarified it had no impact on absolute profitability, only on the denominator for percentage calculations.

    Management acknowledged

Q&A highlights

6 direct
Mamaearth primary sales growth outlook Direct
Yes. So from a going forward, I think the first objective is that a high single-digit growth in next quarter and the objective to touch, getting to double-digit growth by Q4 and then try to maintain that as we get into next year.

Clarifies management's specific growth targets for Mamaearth, indicating a phased recovery towards double-digit growth.

Asked by Videesha Sheth

Mamaearth primary sales vs Q2 FY24 (pre-Flipkart adjustment) Partial
Yes. We will need to sort of look at that number and come back to you. But over the last year base, it's now in the single-digit growth in primary, even adjusting for the Flipkart impact.

Management could not immediately provide a direct comparison for Mamaearth's primary sales against a pre-Flipkart adjusted base from Q2 FY24, indicating some complexity in historical data comparison.

Asked by Nihal Mahesh Jham

Mamaearth non-core categories strategy Direct
So from a next few years, which is next 2 to 3 years perspective, the focus will be just to sort of completely focus on the 6 core categories and strongly grow them. And of course, the non-focus categories are declining, right, and their contribution hence will continue to go down.

Highlights a clear strategic shift to consolidate focus on 6 core categories for Mamaearth, implying a planned reduction in contribution from non-core segments.

Asked by Nihal Mahesh Jham

Wellness as a category opportunity Partial
Actually a very interesting area of conversation. I think I will park that for probably more one-on-one conversation sometimes. So honestly, you're right. We are observing the trend of wellness adoption, nutraceutical adoptions within the market, and we are also observing the regimen trend happening within consumers. How we want to take on that -- do we want to take on that opportunity in the medium term? Yes, we would like to. How we want to take on that opportunity, will it be as part of our extension of current brands or do we need to sort of take it as a separate sort of play? So, it's not something that we have a strategic view on, as we speak.

Management acknowledges the trend in wellness but indicates they do not yet have a concrete strategic view on how to capitalize on it, suggesting it's a longer-term exploration.

Asked by Nitin

Lumineve revenue projection Direct
No projections. It's a young brand. It is right now in a build phase. We will build it slowly, we'll build it right, and prestige brands need very strong foundations. And they are not about explosive growth but foundationally strong bonfire type conversations.

Management explicitly states no revenue projections for the new prestige brand Lumineve, emphasizing a long-term, foundational build-out rather than immediate explosive growth.

Asked by Akshat Jain

Quick commerce economics and contribution Direct
Quick commerce is now about 10% of our revenues already and is the fastest-growing channel for us as we speak. And from an economics perspective, it's got healthy economics. And for us compared to our marketplace business, it's actually relatively healthier economics.

Provides specific data on quick commerce's significant and growing contribution to revenue (10%) and its favorable economics compared to traditional marketplace channels.

Asked by Mudit Minocha

Mamaearth turnaround and direct distribution progress Direct
And I think I would say about 85% of the clusters where we needed the right distributor and for the 15% clusters, we're still, as we speak, building that strength and that should also happen over the next 3 to 6 months across the top cities that we talked about. And that has, of course, helped us improve direct distribution. We talked about increase in our secondary distribution by 35%. And we also talked about how our direct distribution is now 80% of our billing that is happening through direct distributors.

Details the successful transition to direct distribution, with 80% of billing now coming from direct channels and ongoing expansion, which is critical for Mamaearth's growth.

Asked by Mudit Minocha

Staze brand progress and supply chain challenges Direct
So mostly the progression has been good, right, I think from a brand searches perspective, PMF perspective, and the brand is growing triple digits over last year. So I think that has been a good sign. It's a category which has been a learning for us. It's a complex supply chain that we have taken time to learn on. It's a shade-based supply chain. It's also a supply chain where there is some reliance on China supply chain for packaging and in some cases, conversion perspective.

Reveals strong growth for Staze but also highlights the inherent complexity and reliance on the China supply chain for this shade-based category, indicating a learning curve.

Asked by Jitendra Arora

2 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Honasa Consumer delivered a robust Q2 FY26, with like-for-like revenue growing 22.5% to ₹566 crores. Gross profit reached an all-time high of 71.9%, reflecting strong operational efficiency. The company reported an EBITDA of ₹48 crores, maintaining a stable margin of 8.4%, and a PAT of ₹39 crores. For the first half of FY26, the company achieved 14.5% growth, with an EBITDA of ₹93 crores and PAT at 7%.

Strategic Focus on Core Categories and Mamaearth Turnaround

The company's strategy to focus on core categories is yielding results, with these categories now contributing 75% of total revenue, up from 70% last year, and targeted to reach 84-85% in the next 4-6 quarters. Mamaearth has successfully returned to green growth across all channels, with a hero SKU (rice face wash) entering the ₹100 crores plus club. Management aims for Mamaearth to achieve high single-digit growth next quarter, moving to double-digit growth by Q4 FY26 and maintaining it into FY27.

Strong Performance of Young Brands and Derma Co

The portfolio of young brands, including BBlunt, Aqualogica, Dr. Sheth's, and Staze, collectively achieved 20% Y-o-Y growth. Derma Co, the second-largest brand, reached an annual recurring revenue (ARR) of ₹750 crores with a high single-digit EBITDA profile. It has become the number one sunscreen brand in India for 2024 (Euromonitor) and aims to reach ₹1,000 crores plus ARR in the next 1-2 years by expanding into moisturizer and shampoo categories.

Distribution Expansion and R&D Innovation

Honasa significantly strengthened its general trade distribution, reporting a 35% Y-o-Y increase in direct outlet billings. The transition from super-stockists to direct distributors is largely complete in top cities, with 80% of the business now coming from direct distribution. R&D efforts led to new product innovations, such as deep penetration formulas in Derma Co and the first in-vivo tested sunscreen with anti-pollution factor in Aqualogica, enhancing product superiority and market relevance.

New Growth Engines: Oral Beauty and Prestige Skincare

The company is actively exploring new growth engines, including the oral beauty segment, which is projected to be a $700 million opportunity by 2030. Honasa made a strategic minority investment in Fang, an early-stage oral beauty brand, to build it into a prestige leader. Additionally, Honasa launched Lumineve, a new prestige skincare brand exclusively focused on night care, targeting the $4 billion prestige skincare market opportunity over the next decade. This brand is priced at 2.5x their current product categories.

Impact of Flipkart Revenue Recognition Change

A change in Flipkart's settlement process resulted in a ₹28 crores revenue recognition impact for Q2 FY26. Previously, logistics and fulfillment costs were invoiced separately, but now they are reduced directly from revenue. While this change impacted the reported revenue denominator, management clarified that it had no effect on the company's absolute profitability or net contribution margin from the channel. The like-for-like growth, adjusting for this change, remained strong at 22.4%.

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