Mamaearth parent Honasa Consumer on Thursday reported an 18% fall in its net profit for the fourth quarter of FY25 to Rs 25 crore, but beat the street estimates of Rs 17.3 crore, amid strong growth in core categories.
In the same quarter last year, the company’s profit stood at Rs 30 crore.
The revenue from operations were also in line with the street expectations and rose around 13.3% to Rs 533.56 crore from Rs 471 crore earlier.
Bloomberg Consensus estimates had pegged the revenue for the quarter at Rs 533.56 crore.
The company’s Ebitda during the quarter stood at 5.1%.
In the July-September quarter, Honasa had slipped into the red as it undertook Project Neev to change its direct-to-consumer (D2C) distribution model.
Under the new model, the company has started reducing its reliance on super stockists and is transitioning to a direct distribution model in the top 50 cities. The necessitated inventory corrections lead to a loss of Rs 18.5 crore in Q2FY25.
In an analyst call on Thursday, Varun Alagh, chairman and CEO, Honasa Consumer, said the new strategy has now started showing results for its main brand Mamaearth, and inventory levels with distributors have reached the right range.
“We are seeing the changes now deliver a stable, consistent outcome,” he said.
The number of direct distributor outlets of the company has now reached around 102,000 from 45,000-50,000 last year.
“In Q4, our direct distributor contribution rose to 71% from 38% in FY24,” Alagh said.
The company’s categories in focus witnessed a double-digit year-on-year growth during the quarter. Notably, five categories including face wash, shampoo, sunscreen, moisturiser and baby care contributed around 70% to the revenue.
Honasa has also been improving its media mix modelling for the last few quarters.
Alagh said that this has also started showing green shoots as e-commerce and modern trade have seen a double-digit demand uptick in in-focus categories.
The change in media mix often shows results in these two channels first. The modern trade showed a 20% y-o-y offtake growth during the quarter.
In FY26, Honasa Consumer aims to add 50,000 more direct distribution outlets to improve control as well as efficiency.
Alagh also said that the younger brands like BBlunt, Dr Sheth’s, Staze and Aqualogica are showing a healthy growth momentum of over 30%, mainly via online platforms, including quick commerce.
The company will continue with premiumisation in prestige segments and products like serums, he added.
Honasa Consumer has also increased the use of agentic AI in various forms like purchase assistants, content evaluation, and social listening. “This year, we want to focus a lot on in-built agentic workflow tools.”