1. At a Glance
Honasa Consumer—maker of Mamaearth, The Derma Co., BBlunt—boasts being India’s largestdigital-firstbeauty brand by revenue. Yet, margins? A delicate 3% on revenue, and the company trades at a mind-boggling123× P/E. That’s not valuation, that’s a reflective spa treatment for investors.
2. Introduction
Founded in 2016, Honasa flipped the script on traditional FMCG by focusing purely on D2C channels and Instagram influencers—before pivoting offline amidst competition. Despite a recent loss of ₹120–150 Cr in FY25, they’ve clawed their way to profitability in Q1 FY26 with record revenues. Skin-deep success or sustainable glow? Let’s find out.
3. Business Model (WTF Do They Even Do?)
Honasa is a brand house, not a manufacturer. Their playbook:
- Launch “natural” and “clean” personal care brands.
- Use flashy digital marketing.
- Ship via D2C (online) and expanding offline.Roast: Think HUL-lite, with prettier packaging and virtually no mature margins.
4. Financials Overview
Q1 FY26 Results:
- Revenue:₹595 Cr (record high; +7.4% YoY)
- Net Profit:₹41 Cr (+2.7% YoY)
- EBITDA:₹46 Cr; margin improved to ~7.7%.
- ROE:~6%;ROCE:~7.5%.
- P/E recalculated forward:₹269 price / EPS ₹1.27 ≈212x—yep, valuation just got more surreal.
5. Valuation (Fair Value RANGE only)
| Method | Value Range |
|---|---|
| P/E-based | ₹65–110 (20–30× forward EPS) |
| EV/EBITDA | ₹80–120 (3×–5×) |
| DCF (aggressive) | ₹90–130 |
FV Range:₹65
– ₹130
Disclaimer:This FV range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers & Drama
- Q1 FY26 delivered the company’shighest-ever revenue and sequential profit recovery.
- Offline distribution and new brands are lifting sales—but marketing costs are eating into margins.
- The stock trades like a D2C craze, not like a margin-squeezed, debt-free beauty firm.
7. Balance Sheet Snapshot
Honasa is essentially debt-free, but its capital structure is messy. Historic losses, unsavory liabilities, and the need for continual marketing reinvestment leave little room for comfort.
8. Cash Flows
They had positive CFO in Q1, but FY25 saw negative cash. The burn is real—and likely to continue unless the offline push cracks the margin
