Original | November 13, 11:45 IST

Shares of Honasa Consumer surged 9.4% to INR 308.55 during the intraday trading on the BSE today after the company reported a return to profit in the September quarter yesterday.

The Mamaearth parent posted a consolidated net profit of INR 39.2 Cr in Q2 FY26 as against a loss of INR 18.6 Cr in the year-ago quarter, which was impacted by its shift from a super-stockist-led model to a direct distributor model.

Operating revenue rose 17% YoY to INR 538.1 Cr from INR 461.8 Cr in Q2 FY25, though both profit and revenue declined 5% and 10%, respectively, on a QoQ basis.

At 10:52 IST, the stock was trading 4.4% higher at INR 294.40 on the BSE. The company's market capitalisation stood at INR 9,578.89 Cr ( around $1.1 Bn). Nearly 1 Cr shares had changed hands by then.

Brokerages gave mixed calls on the stock following the Q2 financial performance. Jefferies and ICICI Securities maintained a 'Buy' rating with target prices of INR 450 and INR 400, respectively, while HSBC and Emkay Global retained 'Reduce/Sell' ratings with target price of INR 264 and INR 250, respectively.

Jefferies said Honasa's "business momentum is strengthening with 17% volume-led growth and notable margin improvement", adding that Mamaearth's offline expansion is driving results across its portfolio.

HSBC noted that while emerging brands grew 20% YoY and margins improved, Honasa remains a "low double-digit grower", with valuations already reflecting much of the optimism.

During the quarter, Honasa entered the prestige skincare segment with the launch of Luminve. Besides, the company is also entering the oral care segment with the acquisition of a 25% stake in Fang.

The company's offline reach expanded over 35% YoY to about 2.5 Lakh FMCG retail outlets.

Honasa's YoY revenue growth would have been higher at over 22% if not for a INR 28 Cr hit due to Flipkart's new settlement structure, which now deducts fulfillment and logistics costs directly from seller payouts. Since a large portion of Honasa's sales comes via Flipkart, this change impacted reported revenue. However, it didn't have any impact on the profitability.

It is pertinent to mention that shares of Honasa are up over 18% year to date.