ICICI Securities initiates coverage on this beauty and personal care brand, sees 28% upside potential

Mamaearth, the flagship marque of Honasa Consumer, has established itself arsenic 1 of India's fastest-growing BPC brands and has surpassed an yearly turnover of ₹1,000 crore.

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"We exemplary revenue/EBITDA/PAT CAGR of 23%/51%/55% implicit FY24E-FY26E. We initiate sum with BUY standing and DCF-based people terms of INR 550. At our TP, the banal volition commercialized astatine 71x FY26E EPS and 6x EV/Sales FY26E. Key risks see excessive competition, execution miss, debased occurrence successful scale-up of caller brands," the brokerage steadfast said successful its note.

ICICI Securities highlighted that the user discretionary player's concern exemplary prioritizes integer channels, facilitating accelerated merchandise launches—an imperative successful the competitory BPC sector. This attack besides enables effectual assets allocation successful selling and distribution, ensuring efficiency.

The brokerage stated that Honasa Consumer has developed a template based connected societal impervious to found brands. Particularly successful sectors similar beauty, characterized by precocious uncertainty regarding merchandise show and infrequent purchases, consumers question societal impervious specified arsenic ratings oregon influencer-driven merchandise acquisition to assistance successful their decision-making process.

“Mamaearth has emerged arsenic the fastest increasing marque successful India to scope an yearly turnover of INR 13bn successful FY24E wrong 8 years of its launch. The execution is awesome compared to gross show of different starring accepted (GT/MT-heavy distribution) BPC brands successful India," it further added.

In the past 8 years, Honasa has broadened its marque scope by incorporating The Derma Co, Aqualogica, and Ayuga done incubation, and by acquiring Dr Sheth’s and BBlunt. 

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Additionally, Honasa Consumer is progressing towards extending its beingness successful offline organisation channels. Unlike accepted quality and idiosyncratic attraction companies, Mamaearth generates a important information of its revenue, 51 percent, from online channels. Nonetheless, having achieved a definite level of maturity successful the online level sector, the institution anticipates enhancing household penetration by expanding into offline organisation channels.

The shares of Honasa Consumer Ltd ended Monday's trading league successful red, was down by 0.63 per cent to ₹426, against erstwhile adjacent astatine ₹428.70 per share.

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Published: 29 Apr 2024, 04:36 PM IST