Honasa Consumer shares rally 10% after CLSA upgrade but stock remains below IPO price

Shares of Honasa Consumer Ltd., the parent company of Mamaearth, are trading with gains of 10% on Wednesday, August 13, in response to their June quarter results. The results were reported after market hours on Tuesday. The stock has gained in the last two trading sessions.Honasa Consumer posted a net profit of ₹41 crore for the June quarter, up 2.7% year-on-year. Revenue rose 7% YoY to ₹595 crore in Q1 FY26.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined 1% YoY to ₹46 crore, with an EBITDA margin of 7.7%.

Hong Kong-based brokerage CLSA upgraded Honasa Consumer to ‘Outperform’ and raised its price target to ₹333.The brokerage said that Q1 revenue growth of 7.4% YoY (in line with expectations) with underlying volume growth of 10.5% YoY. Growth was impacted by the early onset of the monsoon, which hurt sunscreen sales (about 200 bps impact).

EBITDA margin expanded 264 bps sequentially to 7.7%, leading to a 47% and 44% EBITDA beat versus CLSA and consensus estimates, respectively.Management guided for an EBITDA margin of about 7% in FY26, with 100-150 bps expansion each year over the next four to five years. CLSA also raised FY26-FY28 earnings estimates by 15-26%.

Jefferies maintained a ‘Buy’ rating on Honasa Consumer with a price target of ₹400, citing positive surprises on margins.

The brokerage said that unseasonal rains impacted revenue growth, particularly in the sunscreen segment, but Honasa still delivered sequential EBITDA margin improvement and a beat on expectations.

Jefferies also said that while new brands continue to grow slowly, Mamaearth itself is yet to fully recover, though it remains a focus area for growth.

Shares of Honasa Consumer settled 1.75% higher at ₹271. The Mamaearth-parent still trades below its IPO price of ₹324.