33% Surge in this Stock in Two Days: Meet the Daddy who Saved the Mama
Explore the reasons behind Honasa Consumer’s dramatic 33% stock rise in just two days
Shares of Honasa Consumer, the parent company of Mamaearth, have seen a remarkable rally following their latest quarterly earnings release. However, the stock's upward trajectory isn't solely based on fundamentals, as it soared 13% on Friday, building on a 20% gain from the previous trading session.
Jefferies' Vote of Confidence
Honasa has captured the attention of international brokerages, particularly Jefferies, which recently added the company to its model portfolio with a target price of Rs 530. Jefferies praised the firm for its robust growth and resilience against economic downturns and inflation.
In a note on November 23, Jefferies said “The company was on a strong growth trajectory, delivering 30%+ revenue growth with steady margin expansion”.
A Look at Honasa's Impressive Financials
Just last week, Honasa reported a staggering 93% surge in consolidated net profit at Rs 29 crore for the quarter ended September 30, compared to Rs 15 crore in the same period last year. The firm’s operational revenue also witnessed a healthy growth, escalating by 21% to Rs 496 crore, up from Rs 410 crore in the same quarter last year.
Further underlining its financial strength, Honasa reported a 53.5% rise in its EBITDA, which climbed to Rs 40.3 crore. Additionally, the EBITDA margin improved substantially, increasing by 170 basis points to reach 8.1%. The quarter also saw a robust 27% growth in underlying volume, indicating a strong market demand for the company's products.
Honasa ESOP Block Deal
Sources close to CNBC-Awaaz reveal that the employees of Honasa Consumer are set to benefit from an ESOP block deal worth Rs 150 crore. This deal, facilitated by Kotak, represents a considerable portion of the company's equity (31 lakh shares) and is expected to be executed at a discount to the market price.
Honasa's Market Journey
Honasa’s journey in the stock market began on November 6, with its initial public offering (IPO) price set at Rs 324. Despite a challenging start where the stock closed 4% below its IPO price on the first day of trading, the stock has rebounded significantly from its initial dip, marking an 84% increase from its post-listing low of Rs 275.
As Honasa Consumer Care continues to make waves in the stock market, it remains a key player in the evolving Indian corporate sector. Stay tuned for more updates on this and other significant corporate developments.
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