D2C beauty giant Honasa Consumer posts Rs 40.2 crore profit in Q1 FY25, discontinues Ayuga brand while strengthening retail presence across India, including Tamil Nadu
In a significant development for India’s direct-to-consumer (D2C) beauty and personal care segment, Honasa Consumer Ltd, the parent company behind popular brands like Mamaearth and The Derma Co, has reported a substantial 62.7% increase in net profit for Q1 FY25. The company’s performance signals growing opportunities for beauty-tech startups in Tamil Nadu’s evolving retail landscape.
The Gurugram-based company recorded a net profit of Rs 40.2 crore, up from Rs 24.7 crore in the corresponding quarter last year, while consolidated revenue from operations grew 19% year-on-year to reach Rs 554.1 crore. This robust growth comes amid strategic expansion in both online and offline channels, particularly significant for Tamil Nadu’s retail sector.
In a notable strategic shift, Honasa announced the discontinuation of its ayurvedic beauty brand Ayuga, launched in December 2021, citing challenges in establishing product-market fit. The brand, which aimed to offer modern formats of ayurvedic beauty products for Indian millennials, began its sunset phase in June 2024 despite a revamp attempt two years after its launch.
“Honasa has demonstrated remarkable resilience and growth this quarter, underscored by a strong operating performance and improved profitability,” said Varun Alagh, Chairman and CEO of Honasa Consumer. “By leveraging our unique House of Brands strategy, purpose-driven approach, and strong emphasis on R&D and innovation, we are determined to solidify our leadership in the ever-evolving BPC FMCG segment.”
The company’s performance highlights include impressive product business growth of 20.3% and underlying volume growth of 25.2% in Q1 FY25. New product innovations, including Mamaearth Beetroot Face Wash and The Derma Co Snail Peptide 96 Hydrating Serum, contributed 9% to the company’s revenue, demonstrating strong consumer acceptance of their product development strategy.
For Tamil Nadu’s startup ecosystem, Honasa’s expansion strategy offers valuable insights into successful scaling models. The company’s move towards direct distribution in metro cities and its partnership with Reliance Retail to expand to 1,000 consumer touchpoints presents significant opportunities for local startups to learn from and potentially replicate. Mamaearth’s reach to nearly 200,000 FMCG retail outlets nationwide, with a 30% YoY increase in distribution, sets a benchmark for Tamil Nadu-based D2C brands aspiring to scale nationally.
“The success of Honasa Consumer provides a blueprint for Tamil Nadu’s beauty and personal care startups,” notes Dr. Ramesh Kumar, Professor of Marketing at IIT Madras. “Their data-driven approach to product development and distribution, combined with strategic offline expansion, offers valuable lessons for our local entrepreneurial ecosystem.”
The company’s decision to sunset Ayuga also demonstrates the importance of agile decision-making in the competitive beauty market. For Tamil Nadu’s startup ecosystem, this move underscores the significance of maintaining flexibility in business strategies and the willingness to pivot when necessary.
Looking ahead, Honasa’s performance and strategic initiatives could catalyze increased investor interest in Tamil Nadu’s D2C beauty and personal care startups, potentially leading to more funding opportunities and partnerships in the region.
