Honasa Consumer Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Honasa Consumer reported a strong Q3 FY26, achieving record revenue, EBITDA, and PAT. Growth was broad-based, with Mamaearth returning to double-digit growth and young brands maintaining strong momentum. The company's focus on core categories and expanding offline distribution yielded positive results, despite a one-time revenue recognition adjustment and a temporary rise in employee costs.

Highlights

  • Revenue reached a highest ever quarterly figure of ₹602 crores, reflecting a 21.7% YoY growth.

  • Volume growth (UVG) was robust at 30%, indicating strong consumer demand.

  • EBITDA achieved its highest ever at ₹66 crores, with a margin of 10.9%, and PAT almost doubled.

  • Mamaearth, the core brand, returned to teen YoY growth, while other young brands continued to grow at 25% plus.

  • Offline channels (Modern Trade and General Trade) also delivered strong 25% plus growth, with direct distribution contributing almost 80% of revenue.

Concerns

  • A revenue recognition impact of ₹28 crores occurred due to changes in Flipkart Group's norms, though it did not affect the bottom line.

  • Employee costs rose sequentially due to ESOP provisioning and enhanced variable pay, expected to normalize in subsequent quarters.

Key financials

  1. Revenue ₹602 Cr +21.7%YoY
  2. UVG — +30%YoY
  3. EBITDA ₹66 Cr
  4. EBITDA Margin 10.9%
  5. Gross Margin 70% 0%YoY

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 Reginald Men Acquisition · Closed

    To capitalize on the male skincare boom hypothesis, enhance presence in South India, and acquire talent/team from Hyderabad.

    Reginald Men has done extremely well in the last 2 years and is the most searched men's sunscreen brand.

    I think Reginald Men has been one of those brands which completely fit into our male skincare boom hypothesis. And the brand has done extremely well in the last 2 years of its existence and become the most searched men's sunscreen brand based on a multi-benefit proposition which men like. They don't want to get into multi-regime but products which can do multiple things at once. And also helps us enhance our presence in South India.

Guidance & targets

Profitability

  • EBITDA Margin Expansion Profitability · next 2-3 years · High confidence 100 basis points
    Yes, Percy, that is a fair expectation. That is the plan that we have talked about in the past as well, that every year our goal will be to improve the margin profile by 100 basis points.

    — Varun Alagh

  • Gross Margin Profitability · ongoing · High confidence 70% and 70% plus range
    And I think this is in line with our gross margin guidance that we will continue to sort of look at 70% and 70% plus range.

    — Raman Preet Sohi

Portfolio Mix

  • Focus Categories Share of Business Portfolio Mix · next 3 years · High confidence 85%-87%

    Previously 75% → 85%-87%

    Honestly, with the current pace of contribution increase, we expect it to get to about 85%-87% over the next 3 years.

    — Varun Alagh

Brand Performance

  • Reginald Men Brand Size Brand Performance · next 4-5 years · Medium confidence Rs. 500 crore
    Reginald can itself be Rs. 500 crore brand in the next 4-5 years that we acquired.

    — Varun Alagh

Cost Management

  • A&P and Overheads Leverage Cost Management · every year · High confidence at least 100 bps
    I think our endeavor is to unlock at least 100 bps every year with a mix of both A&P and overheads.

    — Raman Preet Sohi

Pricing Strategy

  • Brand Premium Pricing Strategy · ongoing · High confidence maintain
    So we have maintained and will continue to maintain brand premium versus mass brands.

    — Varun Alagh

What to watch in Q4 FY26

EBITDA Margin Expansion

next 2-3 years
Current 10.9%
Target 100 bps YoY expansion

Why it matters

To verify the company's ability to consistently improve profitability as guided.

Yes, Percy, that is a fair expectation. That is the plan that we have talked about in the past as well, that every year our goal will be to improve the margin profile by 100 basis points.

Risks & concerns

  • Competitive Intensity

    medium

    Increased aggression from traditional FMCG players entering online/D2C space, but management emphasizes focus on consumer and agility.

    Both acknowledged

  • Revenue Recognition Impact

    low

    A ₹28 crores revenue recognition impact due to Flipkart Group's norm changes, though it had no impact on the bottom line.

    Management acknowledged

  • Employee Cost Fluctuation

    low

    Sequential rise in employee costs due to ESOP provisioning and enhanced variable pay, expected to normalize.

    Management acknowledged

Q&A highlights

7 direct
Sunscreen Market Share Partial
We did get a Euromonitor indication last year, which has declared that Derma Co is now the number one Sunscreen brand in the country, ahead of the legacy brands. Otherwise, our brands continue to be strong.

Analyst questioned market share amidst competitor aggression; management cited external validation for Derma Co but did not provide specific current market share numbers.

Asked by Abneesh Roy

Mamaearth Growth Sustainability Direct
Vivek that is going to be our plan. And we are feeling confident that we should be able to deliver the same. There is so much opportunity, like I said, in terms of just the gap between share amongst handlers and market share and hence the potential distribution gain that we can do as well as the brand now strengthening and multiple other categories available where we can gain share.

Analyst asked if Mamaearth's teen growth could be sustained for 5 quarters; management expressed confidence citing distribution and brand strength.

Asked by Vivek Maheshwari

Offline Distribution Strategy and Milestones Direct
But the offline play for brands, in our mind is not just about distribution, it is also about pull. And only when you reach a certain scale in online, that you see that natural pull in offline, because of which you are able to then execute better.

Analyst questioned the threshold for offline expansion; management clarified it's driven by category-specific scale and brand 'pull' rather than just revenue milestones, focusing on high-velocity SKUs.

Asked by Vivek Maheshwari

Margin Delivery and Structural Reductions Direct
I think I have always called out that there are three key buckets from which the company will see EBITDA expansion happening, both in short and in long term. So those buckets are A&P leverage, those buckets are payroll leverage and other OPEX leverage.

Analyst inquired if margin expansion was due to ad spend cuts or structural changes; management attributed it to A&P effectiveness, payroll, and OPEX leverage, noting A&P value increased sequentially.

Asked by Percy

Aqualogica Performance and Next Growth Engine Direct
So Varun, while I can understand you don't want to give the numbers separately for Aqualogica, Derma Co etc., and I am not asking for that. Just want some kind of reassurance that Aqualogica is also performing sort of well and is in line with whatever targets that you had put in or is it sort of falling short of them? Varun Alagh: It's on plan.

Analyst sought reassurance on Aqualogica's performance and asked about the next potential large brand; management confirmed Aqualogica is 'on plan' and listed Dr. Sheth's, BBlunt, Staze, and Reginald Men as future growth drivers.

Asked by Percy

Employee Cost Increase Direct
I think it is higher sequentially primarily because we had to do ESOP provisioning. And there is a larger leadership ESOP pool and there is certain milestones aligned. And we had to pre-pone a milestone this year and the allocation of that is actually done in H2, rather than H1, given the visibility of a certain milestone internally.

Analyst questioned the sharp sequential rise in employee costs; management explained it was due to ESOP provisioning and enhanced variable pay, which is a temporary effect.

Asked by Prateek

Competitive Intensity and Strategy Direct
No, honestly, we have always had a competitive threat in the past as well. We were born in a category where there were much large competitors than ours when we launched Mamaearth. And hence, competition is not new to us. But we have always also taken a stand that it doesn't give you any joy or delta by focusing on competition.

Analyst asked about increasing competitive intensity from traditional FMCG players; management reiterated their focus on consumer preferences and agility rather than direct competition.

Asked by Akshay Krishnan

Preserving Brand Premium Direct
So we have maintained and will continue to maintain brand premium versus mass brands. That brand premium is visible in the PTML of our pricing in the market. And it is also visible in the fact that we do not participate in the FMCG defined LUP spaces, which is less than 20 LUP price point kind of spaces.

Analyst questioned how the company plans to preserve brand premium while expanding distribution; management confirmed commitment to premium pricing and avoiding low-price point segments.

Asked by Akshay Krishnan

2 min read 6 chapters

Detailed narrative

Overall Performance and Growth Drivers

Honasa Consumer achieved its highest ever quarterly revenue of ₹602 crores in Q3 FY26, marking a 21.7% year-on-year growth. This was accompanied by a robust 30% volume growth (UVG). The company also reported its highest ever EBITDA of ₹66 crores, translating to a 10.9% margin, and almost doubled its PAT. Management highlighted that the core brand, Mamaearth, returned to double-digit YoY growth, while other young brands continued to grow at over 25%.

Margin Trajectory and Cost Management

The company's gross margin remained flat year-on-year, staying within the guided range of 70% and 70% plus. EBITDA margin trajectory showed improvement, and management aims to improve the overall margin profile by 100 basis points year-on-year for the next 2-3 years. This improvement is expected to come from A&P leverage, payroll leverage, and other OPEX leverage. A sequential rise in employee costs was attributed to ESOP provisioning and enhanced variable pay, which is expected to normalize.

Brand Performance and Category Focus

Mamaearth's return to teen YoY growth was a key highlight, driven by improved formulations and aspirational communication. The company's focus categories, which receive over 90% of investments, continued to grow ahead of the overall company growth at +25%. Derma Co, a key young brand, not only sustained strong growth but also achieved a double-digit EBITDA profile in the quarter. Aqualogica was reported to be 'on plan' with its performance.

Distribution Strategy and Offline Expansion

Offline execution has significantly improved, with direct distribution now contributing almost 80% of revenue. Outlet reach has expanded, and weighted distributions are healthy, with inventory holding days optimized at about 30 days. Both E-commerce and offline channels (Modern Trade and General Trade) are delivering strong growth of 20% plus and 25% plus respectively. The strategy for offline expansion emphasizes brand 'pull' and focusing on high-velocity SKUs, with only 20 SKUs of Derma Co taken offline.

Innovation and Product Development

Honasa continues to invest in product renovation and innovation, with multiple new formulations delivering blind test-winning performance against international brands. The R&D team is continuously working to improve products. The company also focuses on identifying white spaces and building hypotheses around them for future growth engines. For instance, Aqualogica is undergoing a refresh to appeal to Gen Z and Gen Alpha consumers.

Acquisition Strategy and Future Growth Engines

The acquisition of Reginald Men, a male skincare brand, aligns with the company's hypothesis of a booming male skincare market. Reginald Men has performed well, becoming the most searched men's sunscreen brand, and is expected to become a ₹500 crore brand in the next 4-5 years. This acquisition also helps enhance Honasa's presence in South India. Other potential future growth engines identified include Dr. Sheth's (premium serums), BBlunt (professional hair care), and Staze (color cosmetics).

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