Honasa Consumer, the parent of beauty and personal care brand Mamaearth, nearly doubled its net profit to `50 crore in the December quarter, compared to `26 crore in the year-ago period.

Revenue from operations rose 16% year-on-year to Rs 602 crore, while total expenses rose only 8% in the quarter. The company said it took a `28 crore hit to revenue due to a change in settlement by Flipkart — where logistics and fulfillment costs are now adjusted in revenue reporting — though this had no impact on the bottomline.

Topline was driven by 25% growth year-on-year in its younger brands, including The Derma Co, Aqualogica, Dr Sheth’s, BBlunt and the colour cosmetics line Staze 9to9. Its flagship brand Mamaearth is now back to double-digit growth in the teens. 

“We’ve seen strong market share gains in our core categories, pointing to the fact that we’ve done significantly better than other brands,” CEO Varun Alagh said on the post-earnings call with analysts.

Honasa is witnessing a steady recovery in performance after grappling with distribution challenges in 2024 during its transition from a super stockist model to direct distributorship in its top 50 cities. The move, aimed at boosting offline sales as post-pandemic online demand began easing, is now bearing fruit.

As revenue grows, the company is seeing certain costs as a percentage of revenue shrinking. For instance, ad expenses rose to Rs 186 crore in Q3, from Rs 177 crore a year ago, but as a percentage of revenue, it fell to 30.9% from 34.3%. Similarly, other expenses as a percentage of revenue fell from 20.6% to 15%. 

However, employee costs as a percentage of revenue increased marginally to 11.8%. In absolute terms, it rose to Rs 71 crore in the quarter from Rs 52 crore in Q3 FY25. The company also recognised Rs 4.8 crore as a one-time expense related to the impact of the new Labour Code. 

Overall, earnings before interest, tax, depreciation and amortisation rose to Rs 66 crore in Q3 from Rs 26 crore a year ago, doubling margins to 10.9% from 5%.

Founded seven years ago as a toxin-free baby care brand, the company has since diversified into skin, hair, and body care products. Within Mamaearth, the company has narrowed its focus to five key categories — shampoo, face serum, suncare, moisturiser, and baby care — after previously operating across as many as 24 segments. 

The company now sees men’s grooming products as an upcoming opportunity. “Men’s skincare is at a clear demand inflection, with search trends surging across core categories,” the management noted in its earnings presentation. The men’s skincare market is projected to nearly double from about Rs 20,000 crore at present to around Rs 40,000 crore in 2032.