Strong Q2 growth expectations, improving profitability and rising traction across newer brands lift investor sentiment
Shares of Honasa Consumer Ltd, the parent company of Mamaearth, The Derma Co., Aqualogica, Dr. Sheth’s and BBlunt, surged nearly 10.5% in Tuesday’s trading session as investors reacted positively to the company’s strong business update for the September 2026 quarter.
The stock touched an intraday high of ₹493 and moved closer to its 52-week high of ₹509.90, recorded in August. Trading activity also increased sharply, with more than 11.8 million shares changing hands across the NSE and BSE, indicating strong investor participation.
Q2 Revenue Growth Expected in Early 30s
Honasa Consumer said it expects net sales value (NSV) growth in the early thirties year-on-year during Q2FY27. The company expects growth to remain broad-based, supported by its key categories and multiple brands.
The business has maintained the momentum seen during the June quarter, with management expecting another strong performance during Q2FY27.
Mamaearth Maintains Growth Momentum
Mamaearth, Honasa's largest brand, is expected to register high-teens YoY NSV growth during the quarter.
The company attributed the momentum to improving consumer affinity and continued expansion of its offline distribution network. The strengthening presence across general trade and modern retail is expected to provide an additional growth engine beyond the brand's digital-first origins.
Meanwhile, Honasa's younger brands are scaling at a faster pace. Management expects these brands to deliver approximately mid-40s YoY growth, highlighting increasing diversification within the company's portfolio.
Profitability Improvement Remains a Key Focus
Alongside revenue growth, investors are closely watching Honasa's transition towards a more profitable operating model.
The company said it continues to make progress on its objective of improving EBITDA margins and expects to maintain an early double-digit operating margin profile in Q2FY27, accompanied by strong year-on-year improvement.
The improvement in profitability is particularly significant as Honasa continues its transition from a high-growth, cash-burning direct-to-consumer business towards a diversified and profitable FMCG platform.
Newer Brands Strengthen Growth Profile
The Derma Co. has emerged as an important contributor to Honasa's growth, with the brand crossing a ₹750 crore annual revenue run rate.
The company has also been expanding its offline presence, while maintaining healthy channel inventory. Secondary sales through general trade and modern trade have reportedly been growing at more than 35% annually, supporting the company's efforts to increase market penetration.
Honasa's recent acquisition of a controlling stake in Fluence Pharma also provides an opportunity to enter the higher-margin nutraceutical and dermatological supplement segments under its planned Honasa Health platform.
Brokerages Turn More Positive
Analyst commentary following the business update has been largely constructive.
Kotak Securities highlighted Honasa's transformation into a multi-brand FMCG platform, with non-Mamaearth brands becoming increasingly important drivers of incremental growth. The brokerage also raised its earnings estimates and increased its valuation target to ₹580, while upgrading the stock to Buy.
JM Financial also expects Honasa to outperform the broader home and personal care segment, citing strong volume growth and continued momentum in newer brands.
Outlook
Honasa Consumer enters the second half of FY27 with improving growth visibility and a stronger profitability profile. The combination of double-digit revenue growth, rising contribution from newer brands, expanding offline distribution and improving EBITDA margins could support earnings growth over the medium term.
However, the sharp rise in the stock price means valuation and execution will remain important considerations for investors. Sustaining high growth while continuing to improve margins will be critical for the company to justify its premium valuation.
With the stock now trading close to its 52-week high, investors will closely track the company's upcoming Q2 financial results, margin performance and management commentary for confirmation that the latest business momentum is translating into sustainable earnings growth.