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Shares of Honasa Consumer, the parent company of personal care brand Mamaearth, hit the 10% upper circuit in today’s trade
Honasa Consumer Share Price (Photo Credit: X)
Shares of Honasa Consumer, the parent company of personal care brand Mamaearth, hit the 10% upper circuit limit at Rs 287.85 during intra-day trading on Wednesday, following reports that one of its co-founders had increased his stake in the company.
At 10:40 AM, Honasa Consumer’s stock was locked at the upper limit, with trading volumes surging nearly fourfold to 4.30 lakh shares, compared to the two-week average volume of around 1.31 lakh shares on the BSE. There were pending buy orders for over 60,000 shares on the exchange. In contrast, the BSE Sensex was up 0.4% or 300 points, reaching 81,145.
Reports indicate that co-founder Varun Alagh has raised his stake in Honasa Consumer to 31.93% by investing Rs 4.50 crore. An investment by a promoter or co-founder is often seen by the market as a strong vote of confidence in the company’s future prospects.
As a result, Alagh’s stake in the beauty and personal care firm increased from 31.88% to 31.93%. Together with his wife Ghazal Alagh, they now hold a combined 35% stake in the company—an unusually high figure in India’s startup scene, where founders often hold smaller stakes to facilitate fundraising.
This stake increase comes at a time when the company is undergoing a major overhaul and has faced a significant drop in its stock value. Year-to-date, Honasa’s shares have fallen more than 38%.
The stock has also been under pressure after the company reported its first quarterly loss in five quarters for Q2 FY25. In the September quarter, the company posted a loss of Rs 19 crore, compared to a profit of Rs 29 crore in the same period last year. Additionally, revenue declined 7% year-on-year, from Rs 496 crore to Rs 462 crore.
Despite these challenges, the stock has gained over 25% in the past week, recovering from the sharp correction that followed its earnings report. However, the sustainability of this rebound remains uncertain, as concerns over a slowdown in growth continue to impact the consumption sector.
In a recent note, Emkay Institutional Equities downgraded the stock to ‘sell’ following the earnings release, citing a weakened medium-term outlook. “We have conservatively revised our earnings expectations down by 35% for FY25-27, cutting topline forecasts by 9-16% and lowering margin expectations due to reduced operating leverage benefits,” Emkay said.
