MamaEarth’s share price also rose 5% to Rs 472 on the BSE after the news went public.
Goldman Sachs, in its report, highlighted that the transformation of India’s beauty industry presents a multi-year growth opportunity, with the combined revenues of five leading beauty startups, including Honasa and Minimalist, set to grow exponentially, increasing 28-fold between FY19 and FY23.
The company sees two big drivers that could help revenue grow 2.5x and EBITDA margins double from FY24 to FY30. Additionally, Goldman expects the expansion of its Derma Skin Care division’s brand portfolio to contribute to this growth.
Goldman Sachs also noted that Honasa’s plans to double its offline distribution to 400,000 retail outlets by FY27 is a major growth opportunity. Honasa has the highest gross margins in its FMCG coverage at 70%, but its EBITDA margins are currently the lowest at 7%. The company expects these margins to improve, projecting them to increase from 7.1% in FY24 to 10.2% in FY27 and further to 14% in FY30. It also expects new brands in Honasa’s portfolio to expand and become profitable during this period.Related article: Hindenburg blackmail plot failed, says Vijay Kedia
As of 10:47 am, the stock was trading 1.5% higher at Rs 458.3 on the BSE. Year-to-date, the stock is up just 8%.
Honasa reported a 63% year-on-year increase in consolidated net profit to Rs 400 crore in the first quarter of FY25, up from Rs 240 crore in the same period last year. The company’s revenue from operations in the June quarter surged 19% to Rs 5,540 crore from Rs 4,660 crore in the same period last year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) margin expanded 201 basis points year-on-year to 8.3%, with EBITDA at Rs 460 crore.
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