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Honasa is India's leading digital-first BPC company, topping revenue charts in FY23, and is the largest company in the DTC BPC market. The focus is on purposeful, tech-infused beauty and personal care brands for millennials, spanning natural care to science-backed skincare and modern Ayurveda.

Mamaearth - The flagship brand, addresses essential customer demands for safe, natural products, prioritizing toxin-free beauty items crafted from natural ingredients. As per the RedSeer Report for FY23, Mamaearth stands as India's fastest-growing BPC brand. On Amazon.in, Mamaearth ranks among the top 5 best-selling brands across four beauty and personal care sub-categories as of August 31, 2023.

House of Brands - Since Mamaearth's launch in 2016, Honasa expanded its portfolio, incorporating The Derma Co., Aqualogica, Ayuga, BBlunt, and Dr. Sheth’s, adopting a 'House of Brands' structure by June 30, 2023.

Revenue Growth - In FY23, the company witnessed a remarkable 59% increase in revenue. Over the past 5 years, the annual revenue growth rate has been an impressive 208.9%, surpassing the industry average of 40.1%. This surge was driven by a 34% rise in online channels (Rs. 227 cr) and a notable 97% increase in offline channels (Rs. 267 cr), establishing the company with the highest offline revenue among digital-first Beauty and Personal Care (BPC) companies.

Profit Margins - FY23 saw a decline in PAT margins (1.53% in FY22 to -10.11% in FY23) due to a Rs. 154 cr goodwill impairment loss, leading to overall losses. Increased expenses, notably a 109% surge in employee benefits and a 262% rise in depreciation and amortization expenses contributed to the downturn.

Key Stakeholders - The company is backed by various notable figures, including Mamaearth co-founders Varun and Ghazal Alagh (one of the sharks of Shark Tank India) investor Kunal Bahl (Snapdeal founder) Bollywood actress Shilpa Shetty Kundra, and the Fireside Ventures Fund.

​Investment Thesis - The company has witnessed a remarkable 58% growth in its top line, achieving a significant presence in both online and offline channels. Notably, it has secured the highest revenue from offline channels among digital-first BPC companies in India during the FY23. Looking ahead, the company aims to further expand its market share through offline channels.

However, despite its impressive performance, there are concerns about the company being overvalued. This is evident in its elevated EV/EBITDA multiple, standing at 207, in stark contrast to the industry average of 29.35, especially when compared to competitors like Emami Ltd., Bajaj Consumer Care Ltd., and Dabur India Ltd. Following a comprehensive analysis, the intrinsic value is determined to be Rs. 52, underscoring the importance of thorough examination before making any investment decisions.