Top FMCG Stock Rises 5% on Strong Coverage; 26% Growth; May Hit ₹570 Soon

Stock to Buy: An International brokerage firm started coverage on Honasa Consumer Ltd (NSE: HONASA), the parent company of beauty and personal care (BPC) player Mamaearth, and the stock gained wings. 

The share price of Honasa Consumer Ltd rose more than five percent in early trade on Tuesday, August 13. 

However, later around 11:45 am, it was trading only 1.62 percent up at Rs 459. Share of Honasa Consumer Ltd opened at Rs 477.95 today.

According to a report, the international brokerage said that “the beauty transformation in India creates growth opportunities for many years”. 

So, it began covering this player and set it a price target of 570 rupees. This indicates an increase of around 26 %.

The combined revenue of the five latest leader beauty products makers, including Honasa Consumer Ltd and Minimalist, grew 28 times faster during FY19-23 as the beauty sector in India is transforming.

Why The Firm Is Bullish?

Brokerage sees two key levers to drive growth in terms of 2.5x revenue growth and doubling of EBITDA margins during FY24-30. The range of brands of Derma skincare brand can be expanded. 

Derma skincare brand, as well as the distribution outside of the brand, can be increased.

The brokerage sees a potential growth opportunity since Honasa Consumer Ltd will expand its distribution offline to 4,00,000. retail stores in FY27.

Honasa Consumer Ltd has the highest gross margin of 70% in FMCG coverage but has the lowest EBITDA margin of 7 %. 

The brokerage expects EBITDA margin to grow from 7.1 percent in FY24 to 10.2 percent in FY27 and 14 percent by FY30.

Honasa Consumer Stock Performance

Key Fundamentals Parameters

Honasa Consumer Share: Last 5 Years’ Financial Condition

Last 5 Years’ Sales:

Last 5 Years’ Net Profit:

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