When Varun Alagh and Ghazal Alagh founded Mamaearth in 2016, they weren’t trying to build a consumer goods company. The startup was born out of a personal problem—finding safe babycare products—and grew into one of India’s biggest direct-to-consumer (D2C) success stories by riding the country’s e-commerce boom.
Nearly a decade later, the founders are telling a different story.
“The first 10 years were about proving that a consumer-first Indian company could build brands that people genuinely trust. The next 10 years are about something even more ambitious: helping define what the future of Indian beauty looks like,” Ghazal Alagh wrote on LinkedIn after Mamaearth parent Honasa Consumer Ltd’s first Investor Day in June.
That ambition reflects how much the company itself has changed. What began with Mamaearth now includes brands such as The Derma Co., Aqualogica, Dr. Sheth’s, BBlunt, and Staze, alongside newer acquisitions in men’s grooming, oral care and pharmaceuticals. The goal is no longer to build a successful digital-first brand, but a diversified consumer goods company capable of competing with India’s fast-moving consumer goods (FMCG) leaders.
The transition, however, has been anything but straightforward. A sweeping overhaul of Mamaearth’s offline distribution network weighed on Honasa’s growth for much of fiscal year 2025 (FY25). That disruption has eased, but another challenge is becoming harder to ignore.
Mamaearth remains the company’s largest brand, yet the “natural” positioning—using ingredients such as onion, turmeric and ginger—that fuelled its rise now competes in a beauty market crowded with rivals selling actives-led products (formulated around scientifically studied ingredients such as niacinamide, retinol and hyaluronic acid to target specific skin concerns) and rapidly shifting consumer preferences. At the same time, Honasa is investing in younger brands such as The Derma Co. and Aqualogica, while expanding into oral care, men’s grooming and nutraceuticals through acquisitions and new bets.
Together, those moves suggest the company’s future depends less on a single flagship brand and more on whether it can build a portfolio of enduring ones—without stretching itself too thin.
Honasa Consumer declined to participate in this story.
Rebuilding the engine
Honasa found itself confronting an uncomfortable reality less than a year after listing in November 2023. The online-first distribution model that had helped scale Mamaearth was proving inadequate for a company that increasingly wanted to compete on the shelves of neighbourhood pharmacies, cosmetic stores and supermarkets.
Until early 2024, Honasa relied on super stockists—large intermediaries between the company and distributors—but the management concluded the model offered limited visibility into inventory movement and demand. Through an internal initiative called Project Neev, it began replacing super stockists with direct distributors, giving the company greater control over execution, retailer relationships and replenishment.
The disruption quickly showed up in the numbers.
In the September quarter of FY25, Honasa reported a net loss of ₹18.5 crore, compared with a profit of ₹29.4 crore a year earlier, while revenue from operations declined to ₹461 crore from ₹496 crore. Management attributed the slowdown largely to a one-time inventory correction as it reset the distribution network.
Investors reacted sharply. Between September and November 2024, the stock slumped nearly 60% from its all-time high as concerns grew over the pace and execution of the transition.
The company’s own messaging also changed. Rather than speaking about expanding offline reach, management began talking about narrowing its focus. “We have realized that we need to make strong tweaks in the product mix and be sharper on investment allocation where we think we have gone too wide. We need to narrow our focus to a few categories and go deep within the hero SKUs,” Varun Alagh told analysts after the September quarter. Hero SKUs (stock keeping units, or the code assigned to each specific product) is how Honasa refers to specific categories such as face wash and sunscreens that have immense growth potential.
- ₹5,500 crore | Honasa's FY31 revenue target, more than double current levels, underscoring its ambition to evolve into a multi-brand beauty company.
- ₹750 crore | The Derma Co.’s annualised revenue run rate, highlighting its emergence as Honasa’s fastest-growing brand and key growth engine.
- $40 billion | Projected size of India’s beauty and personal care market by FY30, up from $23 billion in FY25.
Industry executives say such transitions are rarely smooth. “When Honasa started, it was primarily a D2C brand with a very different route to market,” says Nitin Jain, managing director at consultancy Protiviti Member Firm for India. “But as it evolves into a larger consumer company, general trade remains the strongest way to reach customers in India.”
Unlike digital-first brands, which can scale online with relatively lean operations, general trade depends on dense networks of distributors and retailers built over years. “That system has taken years to build,” says Daman Soni, chief business officer at astrology platform Astrotalk’s e-commerce business, who previously helped scale brands at boAt and GlobalBees. “You can’t decide to change it overnight and expect it to work immediately.” Even with careful execution, he adds, rebuilding a distribution network typically takes three to four quarters as companies appoint new partners and align commercial terms.
More importantly, Soni says, distribution is as much about trust as logistics. “People often think distribution is only about warehouses and trucks. It’s also about relationships. People joke that if you’re serious about general trade, you’ll probably end up attending your distributor’s daughter’s wedding. That’s the level of trust and engagement the business runs on.”
By the March quarter of FY26, the reset was beginning to pay off. Honasa reported its third consecutive quarter of more than 20% like-for-like revenue growth, while management said inventory holding for direct distributors had normalised to 25-30 days. The rebuilt network, Alagh told analysts, was also helping expand brands beyond Mamaearth in general trade.
But for Honasa, fixing distribution solved only one part of the puzzle. While the network was now ready to carry more brands, the harder question was whether Mamaearth—the brand that built the company—could still generate the kind of growth it once did in a beauty market that had become far more crowded and competitive.
Beyond the naturals play
On pharmacy shelves and e-commerce platforms alike, Mamaearth’s early promise is no longer unique.
When the brand launched in 2016, products built around onion oil, ubtan, tea tree, and turmeric helped popularise the idea that Indian consumers could buy affordable skincare rooted in natural ingredients rather than conventional cosmetics. At the time, few digital-first brands spoke the language of “toxin-free” formulations or ingredient-led beauty.
Today, those claims are almost everywhere. The change is visible not only in the number of brands competing for consumers but also in how quickly trends evolve. ChrysCapital-backed Wow Skin Science, which built its identity around apple cider vinegar and onion-based products, saw its valuation fall to about $250 million in early 2025 from a peak of around $400 million, underscoring how difficult it has become for brands built around a single consumer proposition to sustain momentum.
Consumers, too, have become more discerning.
“I first bought Mamaearth because everyone was talking about onion hair oil and it felt different from the hair care products I grew up using,” says a 36-year-old marketing professional in Bengaluru. “Now, when I’m buying skincare, I look for ingredients like niacinamide or ceramides, depending on what I need. I don’t really shop by brand anymore.”
“Consumers today are far more informed than they were five or six years ago,” says Protiviti’s Jain. “They’re looking for long-term efficacy and solutions for specific problems. Companies have to keep innovating because differentiation doesn’t last forever.”
That shift is reshaping India’s beauty and personal care market. According to Redseer Strategy Consultants, the sector is expected to nearly double from around $23 billion in FY25 to $40 billion by FY30, driven by premiumisation, higher online penetration and growing demand for specialised products. But growth alone is no guarantee of scale.
In fact, India is producing more high-growth consumer startups than ever, but only a few become enduring businesses. Bain & Company’s India Insurgent Brand Report, released in June, found that while more brands are crossing ₹100 crore in revenue, most still struggle to grow beyond the ₹100–250 crore mark—a stage where companies typically need to rethink distribution, brand building and expansion strategies.
For companies such as Honasa, that means one successful brand is unlikely to be enough. That evolution is already visible within Honasa’s own portfolio. On the latest earnings call, Varun Alagh described The Derma Co. as India’s largest active skincare brand, citing Euromonitor and Nielsen data, adding that it has crossed an annualised revenue run rate of more than ₹750 crore.
The momentum is also reflected in online sales data. According to data from market intelligence platform 1digitalstack, The Derma Co. ranked among the top three face-care brands across leading quick commerce platforms in June 2026 with a 4.81% market share, up from 3.8% a year earlier. Over the same period, Mamaearth’s share declined to 2.56% from 3.6%. On Amazon, The Derma Co. ranked third in face care, behind Cetaphil and Hindustan Unilever Ltd-owned Minimalist.
“When Mamaearth entered, very few affordable brands occupied that space. Today there are many more players solving the same consumer problem,” Jain points out.
The company’s younger brands, including The Derma Co., Aqualogica, Dr. Sheth’s, BBlunt, Staze and Reginald Men, grew more than 40% year on year in FY26, continuing to outpace the broader business.
Building the next brands
In April last year, The Derma Co.—not Mamaearth—found itself at the centre of one of the beauty industry’s most prominent marketing battles. After Hindustan Unilever’s Lakmé campaign suggested that some “online bestseller” sunscreens overstated their SPF claims, Honasa alleged the advertisements unfairly targeted The Derma Co. The dispute escalated into lawsuits in the Delhi and Bombay high courts before the companies reached a settlement.
For Honasa, the episode marked more than a marketing spat. It signalled how much the company’s centre of gravity had shifted. A few years ago, Mamaearth would almost certainly have led that fight. This time, Honasa put The Derma Co.—its science-led skincare brand—at the forefront.
The episode also offered a glimpse into Honasa’s longer-term strategy. At its first Investor Day in June, the parent laid out ambitions to more than double revenue to over ₹5,500 crore by FY31, grow Mamaearth into a ₹2,000-crore brand, build The Derma Co. into a ₹1,500-crore-plus business, and create at least two more brands with annual revenue exceeding ₹500 crore. Mamaearth and The Derma Co. are thus collectively expected to account for about 70% of the revenue.
The company is already widening its portfolio. Beyond skincare, it has acquired men’s grooming brand Reginald Men, oral care startup Fang and, more recently, Fluence Pharma, while identifying nutraceuticals as another area for expansion. Some buys also signal long-term ambitions. Nutraceuticals, for instance, brings into the picture prescription-led demand, thus tapping premium consumers.
Investor Day disclosures also show that 80% of the company’s innovation investments are now directed towards core categories and the remaining 20% reserved for experimental launches.
Honasa wants its margin on earnings before interest, taxes, depreciation and amortisation (Ebitda, a measure of operational efficiency), to improve to 15% over the next five years, up from about 10% in FY26, helped by a better channel mix between e-commerce and quick commerce and improved operating leverage from efficient distribution.
For Protiviti’s Jain, the logic is straightforward. “Once you’ve built the distribution infrastructure, the economics change,” he says. “The next step is to maximise its utilisation by pumping in a broader basket of products.” That’s a model long followed by established FMCG companies, where the same distribution network is used to scale multiple brands rather than a single flagship.
It’s not just The Derma Co. Honasa is also optimistic about Reginald Men, the men’s grooming brand it acquired in December, which crossed an annualized revenue rate (ARR) of ₹100 crore and doubled year-on-year revenue in the March quarter of FY26.
Brokerages have also revised their ratings after the firm’s net profit touched ₹200 crore in FY26, up from ₹72 crore the previous year. SBI Securities said its outlook for Honasa remains structurally positive, backed by premiumisation and innovation, while Jefferies acknowledged the company’s rebound from the growth slowdown and inventory correction of earlier quarters.
While Honasa’s share price has recovered since 2024 (the shares ended trading on 6 July at ₹468.55 apiece), it’s not nearly close to its all-time intraday high of ₹546.50 reached on 10 September 2024. Much will depend on how the shift in strategy plays out, as it looks to evolve from a company known for one breakout success into one capable of repeatedly creating—and scaling—consumer brands across categories.
The distribution reset may be behind Honasa. The bigger test is only beginning. In a beauty market where new brands emerge every year but few scale meaningfully, the company’s future may depend less on creating the next Mamaearth than on proving it can build the one after that.
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