Mamaearth parent Honasa Q4 revenue up 13%, profit down 16%

Honasa Consumer, the parent of Mamaearth, reported a 13% year-on-year revenue increase in the March quarter, reaching 533 crore rupee (US$62.02 million).

However, net profit dropped 16% to 25 crore rupee (US$2.91 million) from 30 crore rupee (US$3.49 million) a year ago.

This follows a rough patch in the July-September 2024 quarter, when revenue declined 7% to 462 crore rupee (US$53.76 million).

The company posted a net loss of 19 crore rupee (US$2.21 million) due to Project Neev, a restructuring effort in offline distribution.

By the December quarter, net profit stabilized at 26 crore rupee (US$3.03 million), flat year-on-year.

CEO Varun Alagh said the impact of restructuring is now behind them. The company doubled its direct distribution to 100,000 offline stores and plans to add 50,000 more.

Mamaearth remains its top brand, with 70% of revenue coming from core categories like face wash, shampoo, sunscreen, moisturizer, and baby care.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Direct distribution model represents a critical shift in FMCG strategy

Honasa Consumer’s “Project Neev” restructuring reflects a broader industry pivot away from traditional wholesale models toward direct distribution networks.

The company’s transition to direct distribution in its top 50 cities, doubling their direct reach from 50,000 to 100,000 stores, represents a significant operational transformation that initially impacted profitability but aims to deliver long-term growth.

This distribution strategy aligns with evolving FMCG trends where direct-to-consumer models are expanding, allowing brands to connect directly with consumers and gather valuable data on purchasing behaviors and preferences1.

For Honasa, despite the short-term financial impact (a sales return provision of Rs 63.5 crore in Q3 FY25), the company’s 13% revenue growth in Q4 suggests this distribution restructuring is beginning to yield positive results.

The shift reflects wider industry recognition that control over distribution channels provides competitive advantages in an increasingly complex retail landscape where brands must balance both online and offline presence.