Honasa Consumer reports net profit of ₹40.2 crore for Q1, discontinues ayurvedic brand Ayuga

Honasa Consumer, the parent company behind Mamaearth, Aqualogica, and The Derma Co., on Friday reported a net profit of ₹40.2 crore for the fiscal first quarter ended 30 June (Q1FY25), driven by an aggressive expansion of its retail distribution network and gains in the face wash category.

The Gurugram-based firm’s profit surged nearly 63% from the same period last year, while revenue from operations climbed 19% to ₹554 crore. This growth was underpinned by a 30% year-on-year increase in its distribution network, which now reaches 200,000 FMCG retail outlets as of June 2024.

Honasa’s salon and haircare line, Bblunt, achieved an annualized revenue rate of ₹100 crore last quarter, reflecting the company’s diversified brand strategy.

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However, Honasa also retired its Ayurveda-focused skincare brand, Ayuga, in June, citing a lack of traction and stagnant search trends. Launched in February 2022 with wellness ambassador Shilpa Shetty Kundra, Ayuga was rebranded in December last year in a bid to revitalize the brand by enhancing its focus on ingredients and consumer feedback. Despite these efforts, the brand failed to gain momentum.

This marks the second brand discontinuation for Honasa, following the pre-IPO phase exit of Momspresso, its costliest acquisition, as part of a strategy to stem losses and strengthen its bottom line ahead of its public listing.

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Despite these challenges, Honasa reported a strengthened market share in the face wash category, particularly online, while making inroads offline. The category now boasts a gross merchandise value annual revenue run rate (GMC ARR) of nearly ₹800 crore.

In a move to tap into the prestige pricing segment, Honasa introduced ‘Skin Renew by Dr. V’ under The Derma Co brand, developed in collaboration with dermatologist Dr. Vanita Rattan.

The company also signalled a significant shift in its distribution strategy, which it noted could impact business performance over the next three quarters.