Domestic brokerage firm HDFC Securities, in its latest report, has maintained its ‘Buy’ rating on Honasa Consumer, the parent company of Mamaearth, with a target price of ₹550.
The brokerage highlighted the company’s efforts to sustain strong growth across both Mamaearth and The Derma Co., with annual recurring revenue (ARR) for both brands now above ₹10 billion, despite operating in a competitive landscape.
Alongside these two established brands, Honasa has built a portfolio of emerging brands and expanded into newer personal care categories. The brokerage pointed out that Mamaearth and The Derma Co. are now scaling faster across offline channels, where the company has adopted a differentiated approach by leveraging chemists alongside cosmetics retailers.
For offline direct-reach retail, management has set a target of reaching 300,000 outlets by FY31, up from around 120,000 currently. It also said that the company has also materially strengthened its presence in modern trade over the past few years and now has 95% penetration.
In addition, the younger brands Aqualogica, Dr. Sheth’s, BBlunt, and Reginald are well placed in the ₹1-2 billion revenue band, which the brokerage expects to scale further across channels by leveraging the playbook established by Mamaearth and The Derma Co.