Shares of Honasa Consumer (Mamaearth) hit 10% upper circuit at Rs 251.5 in Thursday’s trade backed by heavy volumes on the NSE. A total of 17.6 lakh equity shares worth Rs 43.94 crore changed hands so far.
This rally came after the stock had been under significant pressure. Honasa’s share price had fallen nearly 40% over the past month and more than 50% in the last three months. It also dropped below its IPO price of Rs 324 earlier this month.
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The sharp selloff was triggered by Honasa’s first quarterly loss since its November 2023 listing.For the September quarter of FY25, Honasa reported a net loss of Rs 19 crore, a sharp contrast to a profit of Rs 29 crore in the same period last year. Revenues fell 7% year-on-year to Rs 462 crore, impacted by sluggish demand, a one-time inventory correction of Rs 630 crore, and pressures on its direct-to-consumer (D2C) model.The company’s revenue also declined on a quarter-on-quarter basis, with the net loss widening compared to the previous quarter. In Q1 FY25, Honasa had posted a net profit of Rs 40.25 crore, with revenues at Rs 554 crore, down 17% from the prior quarter.
The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) margin was reported for Q2FY25 at 6.6%, with EBITDA margin adjusted for inventory correction at 4.1%.
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In technical terms, the relative strength index (RSI) of the stock is currently at 14.9, signalling the stock is trading in the oversold territory. Additionally, the MACD is at -38.7, which is below its Signal and Center Line, this is a strong bearish indicator.
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