Archive · 17 Nov 2025
Honasa's Q2 FY26: Profitability Returns Amidst Prestige Brand Expansion
Honasa, the company that makes Mamaearth products, had a good quarter where they made a profit instead of losing money like last year.
Their main brand, Mamaearth, is doing better now.
They are also trying to sell more expensive products in areas like fancy skincare and even toothpaste.
However, some people worry that making these new, high-end products will cost a lot of money and be hard to compete in.
Honasa hasn't shared a lot of details about how well each of their brands is doing, which makes it tricky for investors to know exactly what's working.
Even though they are investing in new brands, they also seem to be spending less on advertising, which makes people wonder how they will build these new fancy brands.
The company's stock has gone up a bit, but people are still watching to see if they can keep making profits and grow their business consistently.
Honasa reported a consolidated net profit of INR 39.2 Cr in Q2 FY26, marking a significant turnaround from a loss in Q2 FY25.
The flagship brand, Mamaearth, has returned to profitability after a downturn caused by a shift in its distribution strategy.
JM Financial upgraded its rating for Honasa to BUY, with a revised 12-month target price of INR 330.
Honasa is expanding into new categories, including oral care with a INR 10 Cr investment in Fang Oral Care, and sleep care with the launch of Lumineve.
Concerns remain regarding transparency in individual brand performance disclosures and the sustainability of expansion into capital-intensive, high-margin premium categories.
- Who
- Honasa (company behind Mamaearth)
- What
- Reported a profitable quarter and is expanding into new, premium categories like oral and sleep care.
- When
- Second quarter of FY26 (Q2 FY26)
- Where
- India
- Why
- To recover from previous losses, sustain growth, and enter high-margin prestige segments.
Optimistic View
Cautious View
Expansion into Prestige and Oral Care
Optimistic View
The company is strategically expanding into high-margin, premium categories which can attract loyal customers and improve profitability.
Cautious View
Entering prestige categories requires significant, sustained investment and faces stiff competition from established global players, with uncertain returns on investment.
Brand Performance Transparency
Optimistic View
Management expresses confidence in the growth of core categories and flagship brands like Mamaearth, which is back in profitability.
Cautious View
Lack of detailed disclosures on individual brand performance, marketing spend allocation, and unit economics makes it difficult for investors to assess the true success of various brand strategies and acquisitions.
Investment and Marketing Strategy
Optimistic View
The company is investing in new growth engines and scaling up premium brands for future profitability.
Cautious View
There is a contradiction between venturing into capital-intensive premium brands and a reported decline in overall advertising spending, raising questions about the sustainability of brand-building efforts.
- Q2 FY26 Net Profit
- INR 39.2 Cr
- Q2 FY25 Net Profit
- Net loss of INR 2.2 Cr
- Mamaearth Performance
- Returned to profitability ('green') after transition to direct distribution.
- JM Financial Rating
- Upgraded to BUY
- 12-Month Target Price (JM Financial)
- INR 330
- Investment in Fang Oral Care
- INR 10 Cr for 25% stake
- New Brand Launch
- Lumineve (sleep care) on Nykaa