Honasa Consumer: Broker Targets Up to ₹565 in FY26

Why Honasa Consumer is back on brokerage radars

Honasa Consumer Ltd, the parent of Mamaearth, has returned to the spotlight after a sharp stock reaction to recent results and a wave of brokerage updates. Emkay, which said it is bullish on the broader BSE 500 universe, also published an upbeat long-term operating roadmap for Honasa even as another Emkay note kept a valuation-led cautious stance. The competing calls underline a familiar split in consumer stocks: improving execution and distribution on one side, and valuation discipline on the other.

Friday’s move: stock jumps to ₹398 after Q4FY26 profit surge

Shares of Honasa Consumer jumped as much as 10.55% to ₹398 on the BSE on Friday after the company reported a 177% year-on-year jump in consolidated net profit for Q4FY26. Profit rose to ₹69 crore from ₹25 crore in the same quarter last year. The sharp profit growth triggered fresh attention to operating leverage and the pace of margin expansion that several brokerages flagged in their notes.

CLSA’s three takeaways: growth, offtake, and operating leverage

CLSA maintained its “Outperform” rating with a target price of ₹434, implying 21% upside from the reference price in its note. It highlighted three points from the quarter:

1. Mamaearth delivered growth in the teens, and management expects double-digit momentum to continue.
2. Offtake growth in general trade and modern trade rose 30% year-on-year, which CLSA read as improving traction.
3. Operating leverage, despite a softer base, helped EBITDA exceed expectations by more than 140 basis points.

CLSA also said Honasa has a long runway to scale brands through its focus categories and hero products. It added that the execution of the Mamaearth turnaround continues to improve and that it expects margin expansion to sustain.

Jefferies turns most bullish: target price at ₹565

Jefferies maintained a “Buy” rating with a target price of ₹565, indicating 57% upside as per the note. The brokerage said that after navigating a tough phase during distribution realignment, Honasa has returned to a strong growth trajectory. It added that performance improved further in the March quarter, led by mid-teen growth in Mamaearth, continued momentum in newer brands, and margins touching record highs.

Jefferies also pointed to the company’s guidance of high-teen revenue growth and 100 basis points of annual EBITDA expansion as a setup for compounding growth.

SBI Securities: structurally positive outlook, target ₹475

SBI Securities said the outlook remains structurally positive, supported by premiumisation, innovation, channel mix optimisation, offline expansion, and operating leverage. It pencilled a high-teens CAGR over five years and 100 basis points of annual margin expansion. SBI Securities maintained a ‘buy’ rating with a target price of ₹475.

Emkay’s long-term bull case: revenue scale-up and “Honasa 2.0”

Emkay Global Financial Services has a ‘buy’ rating on Honasa Consumer with a target price of ₹500, citing 20.5% upside potential in its note. Emkay’s thesis leans heavily on scale and portfolio expansion.

The company’s stated ambition is to become the fastest-growing domestic FMCG player and reach revenue of over ₹5,500 crore, from ₹2,400 crore in FY26, implying an 18% CAGR. Emkay expects Mamaearth and The Derma Co. to contribute ₹3,750 crore, or 68% of the overall revenue, with the balance from other brands. It also highlighted that ₹250 crore (4.5%) is expected to come from next-horizon categories such as nutraceuticals, fragrances, and oral care.

On brand scaling, the targets include Mamaearth becoming a ₹2,000 crore-plus brand and The Derma Co. becoming a ₹1,500 crore-plus brand. Management also wants to build at least two additional brands with revenue exceeding ₹500 crore each.

Margin roadmap: 500 bps EBITDA expansion to 15% by FY31

Emkay’s note lays out a profitability plan that targets EBITDA margins of 15% by FY31 from around 10% in FY26, a 500 basis point expansion. The note attributes the expected improvement to a mix of levers: improved channel mix (100-150 bps), channel-spend efficiencies (100-150 bps), operating leverage (150-200 bps), and favourable category mix (100-150 bps). It also flagged the company’s intent to leverage AI for execution, including AI-enabled innovation, superior product formulations, personalised consumer engagement, and technology-led execution.

Distribution push: Project Neev and the offline build-out

Offline expansion remains central to the narrative. Emkay noted that Project Neev expanded direct distribution reach to 120,000 outlets, with an ambition to reach more than 300,000 outlets by FY31. Management, according to the note, appeared more confident about the current strategy.

The company’s category opportunity is also framed as under-penetrated. Emkay pointed out that more than 50% of revenue is currently generated from only eight dominant category partitions, while more than 80 partitions remain untapped.

Another data point: September quarter comeback and portfolio updates

In a separate update tied to September-quarter results, the stock rose more than 9% in early trade on Thursday. Honasa reported consolidated net profit of ₹39.22 crore versus a loss of ₹18.57 crore in the year-ago period. Revenue from operations rose 16.5% year-on-year to ₹538.06 crore.

The same context highlighted Mamaearth’s return to positive growth and market share gains in face cleansers, with products such as Rice Facewash entering the ₹100-crore annual run rate club. The Derma Co. was described as growing over 20% year-on-year and gaining leadership in segments such as sunscreens. The company also launched the prestige skincare brand Luminéve and invested in Fang, an oral care brand positioned around an “oral beauty” category.

Where opinions diverge: valuation risk and the ‘Sell’ call

While several brokerages highlighted execution and profitability momentum, valuation concerns persisted. One view retained a SELL rating on Honasa with a Sep-26E target price of ₹250, based on 3x sales, with implied P/E of 35x and EV/EBITDA of 30x. Another Emkay Global note reiterated its ‘Sell’ recommendation after discussions with management on business conditions, GST revisions, and priorities, setting a ₹250 target for September 2026 and citing implied P/E of 37x and EV/Ebitda of 31x, with 18% downside versus the prevailing price.

The same note said parts of Honasa’s portfolio, including soaps, shampoos, and hair oil, could benefit from a GST rate reduction to 5%.

Key brokerage calls and targets (as reported)

What to watch next

For investors tracking Honasa Consumer, the immediate focus remains on whether double-digit growth in Mamaearth sustains, and whether newer brands continue to scale while margins expand. The management roadmap points to a larger portfolio strategy, deeper category participation, and wider offline distribution by FY31. Brokerages are likely to keep updating their stance as quarterly trends in revenue growth, EBITDA margins, and distribution gains become clearer.