HSBC Turns Up the Dial: Honasa Consumer Gets a Modest Price Target Lift

Image Source: CA Rachana Ranade

Honasa Consumer Ltd, the parent company of Mamaearth, is back in the spotlight as HSBC has marginally raised its target price to ₹207 from ₹206, reflecting cautious optimism after the company’s recent quarterly results. The move comes as Honasa’s stock rebounded sharply—up over 14% in Friday’s session—following a period of volatility and mixed analyst sentiment.

Key Highlights

Target Price Revision: HSBC’s new target price of ₹207 is a modest increase, signaling restrained confidence amid ongoing sector challenges and Honasa’s evolving growth strategy.
Recent Performance: Honasa Consumer posted a 13% year-on-year revenue jump to ₹534 crore in the latest quarter, with underlying volume growth at 21.2%. However, net profit slid 18% to ₹25 crore, and EBITDA margins contracted to 5% from 7% a year ago.
Mamaearth’s Role: The core Mamaearth brand, which accounts for about 70% of Honasa’s business, showed double-digit growth, helping to drive the company’s overall recovery. Still, analysts remain cautious as margin improvement continues to lag expectations.
Analyst Sentiment: While HSBC’s adjustment is minor, other brokerages like Emkay Global have also raised their targets (to ₹225), citing improved revenue trends but maintaining a ‘Sell’ rating due to margin pressures and the need for sustained growth.
Stock Movement: The stock surged to ₹314.85 after the results, recovering from previous lows and nearing its IPO price, though it remains below its peak and faces ongoing scrutiny over profitability and brand strategy.
Outlook: HSBC and other analysts highlight the need for clearer growth plans for Mamaearth and continued cost discipline before a more decisive upgrade in ratings.

Honasa’s incremental target price hike from HSBC reflects a market in wait-and-watch mode—encouraged by green shoots of growth, but wary of profitability hurdles ahead.

Sources: Investing.com, CNBC TV18, Economic Times