Stock Market Today: Honasa Consumer share price slumped 20% to its 52-week low in Monday's trading session following the announcement of Q2 results. Honasa Consumer, the parent company of FMCG brands like Mamaearth and The Derma Co, announced a consolidated loss of ₹18.57 crore for the second quarter ending September 30, 2024, due to inventory adjustments. In the corresponding quarter of the previous year, the company reported a profit after tax of ₹29.43 crore, as noted in a regulatory filing.
Additionally, Honasa Consumer share price has fallen beneath its IPO price of ₹324, following the company's announcement of its first loss in five quarters. Honasa Consumer share price today opened at an intraday high of ₹319.95 apiece on the BSE while the stock touched an intraday low of ₹295.80 per share.
“Post bad results, prices have seen a sharp down, losing 20% and locked at lower circuits in the opening session. In the near term, prices are likely to continue with negative momentum, and any bounce is likely to get sold into. Traders are advised to exit longs,” advised Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One.
Honasa Consumer reported a 6.9% decline in revenue from operations, totalling ₹461.82 crore in the second quarter of this financial year.
"Revenue for the second quarter was ₹462 crore, indicating a growth of approximately 6.9%, while the revenue after adjusting for inventory changes was ₹525 crore, showing a growth rate of 5.7%," the company mentioned in a filing with the exchange.
The EBITDA (earnings before interest, taxes, depreciation, and amortization) margin for the September quarter decreased by 6.6 per cent, and the EBITDA margin after adjusting for inventory correction stood at 4.1%, it stated.
According to media reports, global brokerage firm JPMorgan has assigned an 'Underweight' rating to Honasa Consumer and has lowered the price target to ₹330 per share. The foreign brokerage has significantly cut its earnings forecasts for FY25-26 due to diminished revenue expectations and a less favourable margin outlook.
Jefferies has kept a 'Buy' rating on Honasa, though it has adjusted its price target downwards to ₹425 per share. Higher inventory correction and associated losses were disappointing, and the founders' remarks about revising their strategy contributed to additional uncertainty, said the brokerage.
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