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Today trading in the Indian stock market has started with a sluggish trend and a decline of about 200 points has been recorded in the main benchmark index Sensex. Due to mixed signals from global markets and profit booking at the domestic level, an atmosphere of caution is clearly visible among investors. Market experts believe that after reaching high levels, investors are trading with some caution, due to which there is pressure on selected indices. However, in contrast to this sluggish environment of the broader market, tremendous action is being seen in the shares of some selected companies on the basis of their excellent financial performance and amid the market selloff, these shares are proving to be a profitable deal for investors.
Honasa Consumer’s Q1 results created a stir in the market
Meanwhile, the shares of Honasa Consumer Ltd, the company that owns popular beauty and personal care brands like Mamaearth and The Derma Co, have registered a strong rise. The company has announced its June quarter i.e. first quarter (Q1) financial results, which have been much better than expected. On the basis of excellent quarterly performance, there was strong buying in the company’s shares, due to which its price has jumped very close to its 52-week high level. This excellent growth of the company has made it the brightest star of the market compared to other consumer stocks going through a recession or slowdown.
Excellent financial results and more than double jump in profits
In the first quarter of the financial year, the consolidation net profit of Honasa Consumer has more than doubled on an annual basis i.e. crossed Rs 90 crore. The company’s net profit was quite low in the same quarter of the last financial year, but this time strong sales of both its main and new brands have taken the profit figures to sky high. Apart from this, the total revenue from operations of the company has also registered a strong double digit growth of about 27 percent on an annual basis to more than Rs 755 crore. The company’s management says that the acceptance of their core portfolio as well as new-age digital brands is increasing rapidly in Tier-1 to Tier-3 cities of the country, the direct benefit of which is visible in the company’s financial results.
Analysts’ opinion and increasing investor confidence
Stock market experts and leading brokerage firms believe that the way Honasa Consumer has recorded a huge jump in revenue and EBITDA while controlling its expenses, is highly commendable. The company’s EBITDA has doubled in this quarter to around Rs 110 crore, which reflects its strong operating efficiency. This is the reason why brokerage houses are looking very positive about this digital-first FMCG company. The keen interest shown by investors in this stock is a proof that the market is paying attention to companies with quality fundamentals and strong brand values in all circumstances, even if there is a slight decline or volatility in the broader indices.