Honasa Consumer Limited: A Quarter of Strategic Growth and Expanding Horizons

Honasa Consumer Limited, the innovative force behind popular beauty and personal care brands like Mamaearth and The Derma Co, has reported a robust performance for the second quarter and first half of fiscal year 2026. The company demonstrated strong financial growth, strategic expansion into high-potential categories, and significant improvements in operational efficiencies. This period highlights Honasa's disciplined approach to market leadership and brand building.

For Q2 FY26, Honasa delivered a like-for-like (LFL) revenue from operations of INR 566 crore, marking a substantial 22.5% year-on-year growth. The gross profit margin reached an impressive 71.9%, reflecting a 318 basis points improvement over the previous year. EBITDA stood at INR 48 crore, with an EBITDA margin of 8.9%. Profit After Tax (PAT) for the quarter was INR 39 crore, translating to a PAT margin of 7.3%. The company also maintained a negative working capital cycle of (9) days, underscoring its efficient cash management.

The first half of FY26 also showcased strong performance, with LFL revenue from operations reaching INR 1,161 crore, a 14.3% YoY growth. Gross profit for H1 FY26 was INR 803 crore, with a margin of 70.9%. EBITDA for the half-year surged to INR 93 crore, representing a remarkable 506.2% YoY growth, with an EBITDA margin of 8.2%. PAT for H1 FY26 was INR 81 crore, achieving a PAT margin of 7.1%.

Financial Performance Snapshot

Note: Revenue from Operations for Q2 FY26 and H1 FY26 are reported figures. Like-for-like (LFL) growth figures are higher, adjusting for changes in Flipkart's settlement process.

Strategic Initiatives and Market Expansion

Honasa's strategic playbook for the quarter focused on strengthening its core categories, expanding into new high-potential segments, and enhancing its distribution network. The company's 'focus categories' now contribute over 75% to its revenues, up from approximately 70% last year, indicating successful resource allocation and market penetration.

A significant development was the investment of INR 10 crore for a minority stake in Fang, a prestige oral care brand. This move positions Honasa to tap into India's premium oral market, projected to reach $700 million by 2030, driven by increasing demand for whitening and advanced benefits. This aligns with the company's vision of 'Crystal-Gazing the Future of I-Beauty' and identifying emerging consumer trends.

Further demonstrating its ambition, Honasa launched Lumineve, a prestige night-focused skincare brand, in an exclusive partnership with Nykaa. This marks the company's entry into the high-value prestige skincare segment, which is expected to become a $4 billion market by 2035. Lumineve, priced at a significant premium, leverages global dermatologist expertise and exclusive ingredient technologies, showcasing Honasa's commitment to innovation and premiumization.

Strengthening Distribution and Brand Performance

Honasa has made substantial progress in strengthening its General Trade (GT) distribution. The company's products are now available in over 2,50,000 FMCG retail outlets across India, a 20%+ year-on-year increase. Critically, the contribution from direct distributors to billing has surged from 33% in Q2 FY24 to 79% in Q2 FY26, indicating a successful shift towards a more efficient and controlled distribution model. This deepening of direct outlet reach, with a ~35% YoY increase in direct outlet billed through distributors in H1 FY26, is foundational for multi-brand growth.

The flagship brand, Mamaearth, has successfully navigated its turnaround, with growth now 'back in green' across e-commerce, modern trade, and general trade. The Mamaearth Rice Facewash has entered the INR 100 crore Annual Recurring Revenue (ARR) club, a testament to its strong consumer acceptance. The Derma Co continues its impressive trajectory, becoming the #1 Sunscreen brand in India with an ARR of INR 750 crore. Younger brands like Aqualogica, Dr. Sheth's, BBlunt, and Staze also continue to register strong double-digit growth, contributing significantly to the company's overall momentum.

Innovation remains a cornerstone of Honasa's strategy. The Derma Co introduced a deep penetration formula for its Vitamin C serum, demonstrating 70% higher absorption. Aqualogica launched India's first in-vivo tested sunscreen with an anti-pollution factor. Dr. Sheth's expanded its prestige serum offerings with new-to-India ingredients, and Mamaearth introduced the Dermasoft Baby Range, co-created with dermatologists. These innovations ensure product superiority and help gain market share.

Outlook and Social Impact

Management guidance points towards continued growth, with Mamaearth aiming for double-digit growth by Q4 FY26. The company expects to maintain its current EBITDA margin range in the coming quarters and targets to unlock 50-100 basis points of operating margin improvement annually. Derma Co is projected to become an INR 1,000 crore+ brand within the next 1-2 years by expanding its moisturizer and shampoo categories.

Beyond financial metrics, Honasa remains committed to its 'Beauty with Purpose' philosophy. The company has planted over 1,000,000 trees, recycled 13,300+ tons of plastic, provided safe drinking water to over 1,100 families, completed 35,000+ health checkups, certified 15,000+ women hair stylists, and empowered 35,000+ students. These initiatives underscore Honasa's dedication to social and environmental responsibility, aligning its growth with positive community impact.

Honasa Consumer Limited's Q2 and H1 FY26 performance reflects a company executing a clear, multi-pronged strategy. With robust financial growth, strategic entries into new market segments, strengthened distribution, and a commitment to innovation and social responsibility, Honasa appears well-positioned for sustained success in the dynamic Indian beauty and personal care landscape.