Honasa Consumer (HONASA) Q3 24/25 earnings summary

Executive summary

• Non-Mamaearth brands delivered over 30% year-to-date growth, now contributing more than 40% of total revenue, up from 25% YoY, while Mamaearth brand performance remained flat to declining.

• Returned to profitable growth in Q3FY25 with revenue from operations at INR 518 Cr, up 6.0% year-over-year, and PAT of INR 26 Cr, maintaining a 5.0% PAT margin.

• Distribution transformation (Project Neev) completed 100% distributor appointments in top 50 cities, with over 150 new partners added in the last 6–9 months and direct outlet coverage doubled to ~90,000 by Dec'24.

• Quick commerce channel grew rapidly, now contributing 7–8% of sales, up from 4–5% last quarter, and grew 200%+ YoY in 9MFY25.

• Significant ESG initiatives: 840,000+ trees planted, 11,100+ tons of plastic recycled, and 25,000+ students empowered.

Financial highlights

• Q3FY25 revenue from operations: INR 518 Cr (6.0% YoY growth); 9MFY25: INR 1,533 Cr (5.8% YoY growth); consolidated revenue for Q3 FY25: Rs 5,175.10 million.

• Q3FY25 gross profit margin: 70.0% (up 132 bps YoY); 9MFY25: 70.2%.

• Q3FY25 EBITDA: INR 26 Cr (5.0% margin); 9MFY25 EBITDA: INR 42 Cr (2.7% margin); Q3FY25 PAT: INR 26 Cr (5.0% margin); 9MFY25 PAT: INR 48 Cr (3.1% margin).

• EBITDA margin for the quarter was 5%, down from 8% previously, with expectations to return to higher levels by H2 FY26.

• Free cash flow in Q3FY25: INR 43 Cr; working capital cycle remains negative.

Outlook and guidance

• Full effect of distribution transition expected over the next two quarters, with growth normalization anticipated.

• Q4 will see increased marketing spend for experimentation, with normalization expected from Q1 FY26.

• Long-term revenue aspiration is to exceed INR 4,000 crore by decade-end, with a goal to double current revenue and achieve double-digit margins.

• Focus on premiumization and innovation in face wash, serum, and moisturizer categories, with moisturizers expected to grow over 3x faster than creams.

• Management remains confident of a favorable outcome in ongoing legal matters and continues to invest in brand visibility and distribution transformation.