THE WHAT?  Indian skincare giant Honasa Consumer, the parent company of Mamaearth, has announced a significant financial turnaround in the fourth quarter. The company reported a consolidated net profit after tax of 304.8 million rupees ($3.7 million) for the three months ending March 31, reversing a loss of 1.62 billion rupees from the previous year.

THE DETAILS  The surge in profits was driven by a strong consumer response to end-of-season sales and discounts, which boosted volumes. High-income urban consumers contributed significantly by stocking up on moisturizers and shampoos, pushing the company’s revenue from operations up by nearly 22% to 4.71 billion rupees. The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) margin improved to 7%, a notable increase from the previous year’s loss of 0.8%.

Honasa Consumer, which also markets products under brands like The Derma Co and Aqualogica, attributed its financial success to strategic cost efficiency measures. These included transitioning to direct distribution and focusing on mature, fast-moving consumer goods distributors to optimize costs. Despite these positive financial results, shares of Honasa closed 1.9% lower ahead of the results, having fallen 8.7% in the January-March quarter

THE WHY?  Honasa Consumer’s return to profitability highlights the growing demand for beauty and personal care products in the Indian market, even amidst inflationary pressures. By capitalizing on consumer trends and implementing strategic cost management, the company has successfully navigated financial challenges. This financial rebound not only underscores the resilience of brands like Mamaearth but also sets a positive precedent for other companies in the beauty and personal care sector facing similar market conditions.