Honasa Consumer

Honasa Consumer reported a strong Q4 FY26 with revenue reaching ₹682 crores, marking a 28% year-on-year growth and the third consecutive quarter of 20%+ growth. EBITDA for the quarter scaled almost 2.5x over the previous year to ₹77 crores, achieving an 11.3% margin. PAT stood at ₹69 crores, representing a 10.2% margin. For the full financial year FY26, the company delivered a 20% YoY growth, tripled its EBITDA to a 9.3% margin, and generated a PAT of ₹200 crores.

The Board has decided to reward shareholders with a dividend of ₹3 per equity share, which amounts to approximately 50% of the full-year PAT of ₹200 crores. The total cash payout for this dividend will be around ₹98 crores. This decision highlights the company's strong cash generation capabilities and its commitment to distributing excess cash to shareholders, while maintaining a negative working capital position.

The company's strategy of focusing on specific categories has paid off, with these focus categories growing by 35% YoY and increasing their contribution by 500 basis points in one year. Mamaearth, the flagship brand, grew at mid-teens this quarter and is projected to achieve a double-digit CAGR over the next five years, driven by opportunities in face wash and shampoo, and distribution expansion from 200,000 to 0.5 million outlets over the next 3-5 years.

Derma Co continued its stellar performance, delivering strong growth, maintaining double-digit EBITDA, and achieving an ARR of over ₹750 crores. The recently acquired Reginald Men brand has been successfully integrated, growing over 100% YoY, doubling its revenue, and crossing the ₹100 crores ARR mark, becoming the sixth brand in Honasa's portfolio to reach this milestone. The growth for Reginald is driven by distribution, category expansion, and geographical reach.

Honasa achieved a 70 basis points YoY expansion in gross margin to 71.4% in Q4 FY26. The decline in 'other expenses' for the full year and Q4 was primarily due to the impact of the Flipkart settlement and reduced GT charges, contributing to leverage and scale benefits. Management aims for a 100 basis points EBITDA margin improvement annually, targeting a total of 500 basis points expansion over the next five years, through a combination of channel spend optimization, brand spend, and OpEx management.

The company is actively pursuing the 'inside-out beauty' trend, offering comprehensive solutions including ingestible vitamins. New product launches contributed 7-8% to growth in the last year, with a strategic shift towards a 3-year horizon for innovations. Honasa is also expanding its geographical footprint for brands like Reginald Men, moving beyond South India to Maharashtra and other states, and strengthening its presence across various e-commerce channels.

To support its long-term growth and build new businesses, Honasa has strengthened its leadership team with key appointments. These include a CEO with experience in cosmetic and makeup companies, a founder of a nutraceuticals brand, and an executive with a background in building new-age companies. These strategic hires are intended to help shape the next horizon of businesses for Honasa.