Jefferies has maintained a “Buy” rating on Honasa Consumer (parent company of Mamaearth) but reduced the target price to ₹425, citing higher-than-expected inventory corrections and reported losses. The brokerage highlighted disappointment among investors following founders’ remarks about reworking the company’s operational playbook, which has added further uncertainty.
In Q2FY25, Honasa reported a 6.9% year-on-year decline in revenue, standing at ₹461.8 crore compared to ₹496.1 crore in Q2FY24. The company posted a negative EBITDA of ₹30.7 crore, a sharp drop from the ₹40.2 crore profit recorded last year. The net loss for the quarter was ₹18.5 crore, a significant reversal from the ₹29.4 crore profit in Q2FY24.
Jefferies noted that the stock might face pressure this week due to low liquidity, leaving current holders potentially stuck in their positions. While acknowledging the setbacks, the brokerage expressed trust in the founders’ ability to recover, adding that Honasa is not the only startup facing transitional challenges.
