Honasa Consumer shares have surged 54% in the past six months, with the stock advancing 12% on Tuesday following its second-quarter business update. According to Live Mint, the stock's year-to-date gains now stand at 63%, reflecting strong investor confidence in the company's growth trajectory. Domestic brokerage firm HDFC Securities has maintained its 'Buy' rating on Honasa Consumer, setting a target price of ₹550. The brokerage highlighted the company's efforts to sustain strong growth across both Mamaearth and The Derma Co., with annual recurring revenue (ARR) for both brands now above ₹10 billion, despite operating in a competitive landscape.
The company expects net sales value growth in the early-thirties on a year-on-year basis for the quarter ended September 30, 2026, growth measured on a like-for-like basis after adjusting for a change in Flipkart's settlement terms that affected the base period. As reported by The Economic Times, Mamaearth, the company's largest brand, is projected to deliver high-teens YoY NSV growth during the quarter, supported by rising brand affinity and a widening offline footprint. The company's younger brands, including The Derma Co., Aqualogica, BBlunt, Dr. Sheth's, Staze, Lumineve and Reginald Men, are expected to accelerate their YoY growth to around the mid-forties. This younger brand portfolio is driving progress in Honasa's efforts to reduce dependence on Mamaearth while maintaining broad-based growth across focus categories.
On distribution, both General Trade and Modern Trade channels are expected to post strong growth, driven by deeper direct distribution and sharper point-of-sale execution. According to the company's update, online channels are also seen sustaining growth momentum. As reported by The Economic Times, offline channels continue to lead growth, with both General Trade and Modern Trade expected to post strong performance, supported by deeper direct distribution and improved point-of-sale execution. Online sales are also expected to maintain their growth momentum, with the company's focus on improving EBITDA margins expected to deliver an early double-digit operating margin profile in Q2 FY27. For offline direct-reach retail, management has set a target of reaching 300,000 outlets by FY31, up from around 120,000 currently. The company has also materially strengthened its presence in modern trade over the past few years and now has 95% penetration.
On profitability, Honasa Consumer continues to deliver on its goal of EBITDA margin improvement, with management expecting the business to deliver an early double-digit operating margin profile in Q2 FY27. According to The Economic Times, the company expects to maintain its focus on improving EBITDA margins, with the business likely to deliver an early double-digit operating margin in Q2 FY27, along with strong year-on-year improvement. The growth is expected to be broad-based, supported by traction across its focus categories and brands, with the offline segment continuing to lead growth initiatives. The company noted that the operating update is provisional and subject to limited review by the company's statutory auditors.
The younger brands Aqualogica, Dr. Sheth's, BBlunt, and Reginald are well placed in the ₹1-2 billion revenue band, which HDFC Securities expects to scale further across channels by leveraging the playbook established by Mamaearth and The Derma Co.. As per Live Mint, HDFC Securities believes Reginald has strong potential to accelerate growth, supported by its focused positioning in male skincare and relatively limited market presence. Management also highlighted encouraging traction for Staze, which is approaching ₹1 billion in revenue. While traditional FMCG players are consolidating around fewer, larger bets, Honasa continues to leverage emerging trends with a clear focus on efficacy.
