Honasa Consumer's Stock Plunge: Strategic Moves Impacting Revenue

Honasa Consumer Ltd, the owner of FMCG brands Mamaearth and The Derma Co, saw its shares drop 20% after announcing a Rs 18.57 crore loss for the second quarter of 2024. The company attributes the loss to strategic shifts, moving from super-stockists to direct distributors in top cities.

Shares of Honasa Consumer Ltd, the company behind FMCG brands Mamaearth and The Derma Co, plummeted by 20% on Monday. This sharp decline followed the announcement of a consolidated loss of Rs 18.57 crore for the second quarter ending September 30, 2024. The drop is largely attributed to an inventory correction.

On the Bombay Stock Exchange, the stock sank to Rs 295.80, hitting the lower circuit limit, while on the National Stock Exchange, it fell 19.99% to bottom out at Rs 297.25. Comparatively, Honasa Consumer reported a profit of Rs 29.43 crore in the same quarter last year.

The company's revenue from operations decreased by 6.9% to Rs 461.82 crore in the recent quarter. According to Chairman and CEO Varun Alagh, the company is focusing on optimizing its distribution model by transitioning from super-stockists to direct distributors, affecting revenues and profits for brands like Mamaearth.

(With inputs from agencies.)