Honasa Consumer Q2 FY27 Earnings Call: Net Sales Jump 36%, EBITDA Doubles YoY

Honasa Consumer Ltd held its Q2 FY27 earnings call on November 06, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Highest-Growth Quarter Since IPO, Volume-Led

• Net sales grew 36% YoY — the highest-growth quarter in the 12 quarters since the company went public, with EBITDA doubling YoY and EBITDA margin at 12.7% in Q2 FY 2026-2027.
• Growth was primarily volume-driven — UVG at 31.3%, accompanied by strong cash generation.
• Gross margin held at 70% — despite crude-linked cost pressures, via cost management and price increases; crude costs flagged as the key near-term input-cost risk.
• EBITDA bridge of 250–270 bps YoY — from mix shift toward more profitable channels (offline, quick commerce) plus A&P efficiency across Mamaearth, Derma Co and younger brands; 110–140 bps unlocked from operating leverage, in line with plan.
• Volume lagged value growth — management attributed the divergence to MRP/price increases (especially in the hair category on crude impact), plus channel and brand mix, and flagged no major concern.

Mamaearth Share Gains; Younger Brands at 45%+

• Mamaearth grew high-teens — balanced across online and offline, with Nielsen-measured share gains of 140 bps in face wash and 50 bps in shampoo; available at 3.2 lakh outlets, numeric distribution up 26% YoY, modern-trade offtake up 40%+ YoY.
• 80% of Mamaearth's Q2 growth delta — came from the existing distribution universe (e-commerce and MT/GT), not new distribution adds; SAH grew faster than market share, indicating headroom to deepen distribution.
• Younger brands grew 45%+ YoY — including Derma Co, and 40%+ even excluding Derma Co, across Aqualogica (Gen Z sunscreen/moisturizers/mist), Dr. Sheth's, Be Blunt, a Gen Z color-cosmetics brand and a men's grooming build-out.
• Derma Co became the second Rs.1,000 crore+ brand — ARR continues at ~Rs.1,000 crore; Nielsen face-wash share ~1.2%; outlet reach at 65,000 within four quarters of offline focus (Mamaearth cited at ~3,00,000 for reference).
• BBlunt hair color grew 100%+ YoY — following the brand's relaunch in FY 2026-2027; styling unlocked on quick commerce (10-minute styling hacks), while the care category (shampoos/conditioners) is doing okay and will be relaunched.
• Face wash was the fastest-growing category — in Q2 FY 2026-2027, followed by shampoo, then sunscreen and moisturizers, with all four growing >20%; face wash is the largest category, followed by sunscreen and shampoo.
• Management pushed back on brand-level growth disclosure — saying removing each brand to get to brand-level growth is "not a competitive, good place to be."

Offline and Quick Commerce Drive Mix Shift

• Channel growth in Q2 FY 2026-2027 (YoY) — e-commerce +20%+ (excluding D2C channel sales, a key growth channel for younger brands); general trade and modern trade each +40%+.
• Offline same-store growth of almost 30%+ — driven by adding Mamaearth and Derma Co partitions into existing stores and deepening outlet reach.
• Management does not expect a significant company-level mix shift toward offline — Derma Co and Mamaearth are growing faster offline while largely online-only brands grow much faster online; both channels expected to grow strongly with different brand participations.
• Channel mix is a margin lever — a higher share of B2B quick commerce and offline trade reduces sales commissions paid on third-party platforms, with the benefit showing up in other expenses; A&P as% of sales broadly flat YoY.

Focus Categories at 80%+ of Revenue; BPC Tailwinds

• Focus categories contribute 80%+ of revenue — up from ~70% when the agenda began 6–7 quarters ago (a ~350–400 bps contribution rise referenced in Q&A), and grew 40%+ in Q2 FY 2026-2027.
• Focus-category market is ~Rs.50,000 crore — with Honasa at ~5% share; management sees headroom to grow via premiumization and share gains over the next 3 to 5 years.
• Management cited structural BPC headroom — India's per capita BPC spend is among the lowest in Asia (lower than Bangladesh); Indonesia, with similar GDP per capita, consumes 4x India's per capita BPC, with Korea, the US and other ASEAN markets further ahead.
• Management is "extremely confident" BPC category growth continues very strongly over the next decade — citing women joining the workforce (a "very large delta") and rising men's participation as adoption tailwinds.
• Hair color flagged as an iBeauty category of interest — India is transitioning from dye to creme format; global hair-color penetration is 5%+ vs low penetration in India; Honasa participates via Be Blunt and will "keenly watch" further participation (aspirational, no commitment); management is also considering entering hair color with another brand and will communicate once launched.
• Innovation pipeline — Mamaearth "cooler chai" tinted lip balm collaboration; Derma Co entered body washes; Aqualogica launched tinted sun serums and a new mist; Be Blunt entering curl care; rice moisturizer a strong blind-test winner ahead of winter.

Above-Plan Q2, But Management Stays Conservative

• Management has been targeting 150–200 bps of margin improvement for FY 2026-2027 — Q2 FY 2026-2027 was a clean improvement trending well above that level (Q1 FY 2026-2027 had certain one-offs).
• CEO Varun Alagh prefers staying conservative — rather than upgrading guidance, noting the business has structurally done better and the current improvement level is a foundation the company is comfortable with.
• H1 FY 2026-2027 EBITDA margin reached ~13.5% — as cited by the analyst, against the company's medium-term aspiration of ~15% EBITDA margin (no specific target year disclosed for the 15% goal).
• Management reiterated a goal to reach a 15% EBITDA margin profile over the next 4 years — the plan already assumes young brand growth and new category/brand launches; there is no year-wise goal, and in other years management might choose to increase margins by only 50–70 bps while doubling down on growth.
• For Q3–Q4 FY 2026-2027, management expressed confidence in holding ~12.5% EBITDA margin — with festivities and accelerated activations factored in.
• Management declined to guide on Q3 FY 2026-2027 sequential pace — when asked whether the ~10–12% sequential Q3 growth pattern of the prior two years could be sustained against the high Q2 base; Q3 will be sequentially higher than Q2, but management would not comment on a ~12% sequential pace, citing seasonality and base effects while noting YoY growth remains strong.

Brand Repositioning and Quality of Growth

• Aqualogica focus — winning in sunscreens (core category), expanding into fragrant body care and building moisturizers; Gen Z acceptance improving per the company's brand tracking research.
• Dr. Sheth's is being repositioned — the original "nature and science" bridge positioning is being relooked as the company sees much larger growth in the actives-using population; the aim is to upsell consumers already buying actives, targeting a higher age cohort where Botox and Collagen ranges perform well.
• Quality of growth measured via brand strength — tracked through independent research avenues and north-star indicators such as search trends; management stated quality of growth is currently healthy, with Nielsen-measured Mamaearth inventory turns improving and consumer health metrics (top-of-mind recall, brand affinity, SAH, PDO) cited as healthy.
• Watch items: crude-linked input costs as the key near-term risk, volume-value divergence from pricing, and management's refusal to upgrade FY 2026-2027 margin guidance despite above-plan Q2.