Mamaearth parent Honasa Consumer shares jump 15% to hit new record high: here’s why

Shares of Honasa Consumer, the parent company of cosmetic brands such as Mamaearth, The Derma Co, and BBlunt, zoomed nearly 15% in intraday trade on Monday, with the share price hitting an all-time record high amid a positive development. The rally in the stock price of the baby, skin, body, and hair care products manufacturer was triggered after it received an order from the National Company Law Tribunal (NCLT), Chandigarh, for merger of its subsidiaries Fusion Cosmeceutics and Just4Kids with it.

Early today, Mamaearth shares opened lower at ₹460.2, down 1.9% against the previous closing price of ₹469.20 on the BSE. Paring opening losses, the midcap stock gained as much as 14.6% to hit new life-time high of ₹537.85, while the market capitalisation crossed ₹17,000 crore. The counter witnessed strong volume as 8.1 lakh shares changed hands over the counter as compared to the two-week average of 0.52 lakh stocks.

The share price of Mamaearth has more than doubled against its 52-week low of ₹256.10 on November 10, 2023. In the last one year, the stock has risen 56%, while it gained over 20% in six months. In the calendar year 2024, the counter added 23%, while it climbed 13% in a month.

In an exchange filing on August 23, Honasa Consumer informed exchanges that the Chandigarh Bench of NCLT approved the amalgamation between Just4Kids Services Private Limited, Fusion Cosmeceutics Private Limited, and Honasa Consumer. On April 19, 2024, Honasa Consumer's board had approved the scheme of amalgamation of these two entities.

Just4Kids Services offers a platform to access information about the city's playschools and schools, hobby and sports classes, events, summer camps, and workshops for kids in Delhi, Gurgaon, Noida, Faridabad, and Ghaziabad. On the other hand, Fusion Cosmeceutics is primarily engaged in the formulation and trading of skincare products. 

For the first quarter ended June 30, 2024, Mamaearth parent Honasa Consumer reported a 63% jump in its consolidated net profit at ₹40 crore as compared to ₹24 crore in the corresponding quarter of the last financial year. The revenue from operations for the April-June quarter stood at ₹554 crore, up 19% over ₹464 crore posted in the year-ago period.

In the financial year 2023-24, Honasa reported a net profit of ₹111 crore, up 5.8%, while sales rose 28.6% to ₹1,920 crore as compared to the previous fiscal. EBITDA for the year was at ₹137 crore with a 562 bps improvement in margin at 7.1%.

As of March 2024, Mamaearth reached 188,377 FMCG retail outlets in India, up 34% YoY, while new products accounted for around 18% of FY24 sales. Throughout the calendar year 23, it introduced 122 new products.

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