Honasa Consumer Ltd
(BOM:544014)
₹
479.1
+11.2 (+2.39%)
Market Cap: 156.20 Bil
Enterprise Value: 152.36 Bil
PE Ratio: 78.28
PB Ratio: 11.05
GF Score: 56/100 
Q1 2027 Honasa Consumer Ltd Earnings Call Transcript
Aug 13, 2026 / 12:00PM GMT
Release Date Price:
₹479.1
(+2.39%)
Key Points
Positve
- Honasa Consumer Ltd (NSE:HONASA) delivered a strong Q1 FY27 with 32% revenue growth, 30.5% volume growth, and an EBITDA of INR110 crores, showcasing robust operational performance.
- The company achieved significant EBITDA margin expansion of 300-350 basis points from mix improvements and 100 basis points from operating leverage, aligning with its five-year margin expansion plan.
- Mamaearth, the core brand, accelerated to high-teens growth, driven by focus categories and hero SKUs like Tea Tree face wash and Rosemary shampoo, which has become a INR100 crore ARR ingredient.
- The Derma Co. became the second INR1,000 crore brand in the portfolio, with strong traction in offline and modern trade, and has entered the teens EBITDA club, demonstrating successful brand scaling.
- The company's offline distribution strategy is paying off, with general trade secondary growth at 40%-plus and modern trade offtakes at 40%-plus, while maintaining healthy inventory levels of less than 30 days.
- Honasa Consumer Ltd (NSE:HONASA) successfully entered the fragrance category with the launch of 'Friccin', a patented, elixir-based brand targeting long-lasting perfumes, positioning for future growth in a high-potential market.
- The acquisition of BTM Ventures has been highly successful, growing the brand almost 100% to an ARR of INR150 crores, expanding into new geographies and categories, showcasing the company's inorganic growth capabilities.
- The company maintains a negative working capital position and generated INR83 crores of cash in the quarter, indicating strong cash flow generation and financial health.
- Young brands (excluding BTM Ventures) continue to grow at 30%-plus, with Aqualogica undergoing a successful restage for Gen Z, indicating a strong pipeline for future growth.
- The company is confident in its growth trajectory, expecting to exceed its five-year high-teens CAGR this year, with a clear strategy to prioritize growth while expanding margins by 100-150 basis points annually.
Negative
- The reported growth figures are still impacted by the Flipkart settlement, with like-to-like growth differing from reported growth, though this will normalize from next quarter.
- The company faces potential margin headwinds from rising crude oil and packaging material costs, which are expected to impact Q2, despite calibrated price increases.
- The EBITDA margin improvement in Q1 included a non-recurring one-time OPEX benefit and seasonal tailwinds from summer categories, which may not be sustainable in subsequent quarters.
- The company's younger brands (excluding The Derma Co.) have struggled to scale beyond INR150-200 crore ARR, with challenges in scaling brands like Aqualogica, Dr. Sheth's, and BBlunt to the next level.
- The fragrance category entry is a new venture with inherent risks, as the company previously discontinued a fragrance foray under Mamaearth due to poor product-market fit, and the success of 'Friccin' is yet to be proven.
- The company does not provide detailed channel-wise breakdowns (e.g., own website vs. quick commerce), limiting transparency for investors on specific growth drivers.
- The management's margin guidance of 100-150 basis points annual expansion appears conservative given the strong Q1 performance, but they emphasize a growth-first mindset, which may lead to reinvestment that could temper margin gains.
- The company's expansion into nutraceuticals through Honasa Health and the Fluence Pharma acquisition is still in early stages, with the acquisition pending completion and no clear near-term revenue contribution.
- The general trade growth is heavily dependent on a focused distribution strategy in 100 cities, which may limit scalability to broader geographies in the future.
- The company faces intense competition in quick commerce, where it must continuously gain share against a growing number of brands, though it believes brand strength will be a key differentiator.
Operator
Ladies and gentlemen, good day and welcome to the Honasa Consumer Limited Q1 FY27 earnings conference call hosted by JM Financial. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Ms. Pooja Kubadia from JM Financial. Thank you, and over to you, ma'am.
Pooja Kubadia
JM Financial - Investor Relations
Hello. Good evening, everyone. Welcome to 1Q FY27 earnings conference call of Honasa Consumer Limited.
Today on call, we have Mr. Varun Alagh, Co-Founder, Chairman, and CEO, Ms. Ghazal Alagh, Co-Founder and Chief Innovation Officer; and Mr. Ramanpreet Sohi, Chief Financial Officer. We will start the conference with prepared remarks from the management, after which we will open the floor for question and answers.
Over to you, Mr. Varun.
Varun Alagh
Honasa Consumer Ltd - Chairman of the Board, Chief Executive Officer, Whole Time Director
Hi. Hello, everyone. Welcome to the quarterly call for Honasa Consumer for quarter one FY27. We
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