Honasa Consumer Ltd Q1 FY27 Results Analysis: PAT More Than Doubles, EBITDA Margin Beat Guidance

Honasa Consumer Ltd reported Q1 FY27 numbers with revenue of Rs. 755.95 Cr (+27.00% YoY) and PAT growth of +118.36% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Honasa delivered a beat on margin guidance (285 bps vs ~100 bps annual target) with EBITDA margin at 14.58% and revenue growing 27% YoY. Cost structure improved dramatically across employee and other expenses, while PAT more than doubled. The only concern is slight gross margin compression due to purchase cost growth. The strong execution against stated long-term targets positions the company well for sustained growth.

Key Investment Insights

Key Positives

• Revenue grew 27% YoY to Rs.755.95 Cr, well above the high-teens CAGR target.
• EBITDA margin expanded 690 bps YoY to 14.58%, far exceeding the ~100 bps annual margin expansion guidance.
• PAT attributable to owners more than doubled, growing 118% YoY to Rs.90.25 Cr.
• EBITDA grew 140% YoY to Rs.110.25 Cr.
• Employee costs as a % of revenue dropped to 8.78% from 10.14% (YoY) and 10.86% (QoQ).
• Other expenses as a % of revenue improved 703 bps YoY from 53.37% to 46.34%.
• Basic EPS rose 118% YoY to Rs.2.77.

Risk Factors

• Gross margin declined to 69.70% from 71.20% a year ago as purchase cost grew 40.8% YoY, outpacing revenue growth of 27%.
• Other income declined 5.78% YoY, though absolute amounts are small.