Target: ₹550
CMP: ₹415.90
Honasa Consumer’ s upcoming analyst meet is likely to focus less on near-term recovery and more on the sustainability of growth, profitability and the long-term shape of the business.
We believe key investor expectations would be: stronger visibility on the sustainability Mamaearth’s return to teen growth, supported by focus category leadership and improving offline execution; clearer articulation of Derma Co’s long-term profit pool, scalability of younger brands and portfolio diversification benefits; and improved disclosure around channel mix, A&P efficiency, operating leverage and medium-term margin aspirations.
Investors would also seek greater clarity on capital allocation priorities, particularly after the maiden dividend announcement, and Honasa’s roadmap to evolve from a portfolio of digital-first brands into a scaled beauty platform with multiple category leaders.
We increase our earnings estimates for FY27/28 by 2.3/5.8 per cent to reflect better revenue growth. We model revenue/EBITDA/PAT CAGRs of 21/27/23 per cent over FY26- 28E. Maintain Buy with a DCF-based revised target price of ₹550 (vs ₹500 previously).
Key risks: Heightened competition; execution miss; low success in scale-up of new brands; and any slowdown in Mamaearth.