Honasa Shares Plunge 11%, Market Cap Falls Below $1 Billion
- Honasa Consumer's shares fell 11%, pushing its market cap below $1 billion.
- The downturn is linked to the company's shift to a D2C model under Project 'Neev'.
- The stock has underperformed the Nifty 50, shedding nearly 40% on a year-to-date basis.
Source: Moneycontrol
The question I guess, we all should be asking, is why was this a $1Bn company so far? If it's a $1Bn consumer brand, either you or your friends or your family or people in your village should be using it.
Why are there absent signs of there being proper adoption of mamaearth.
Here's what I think has happened:
- They flooded offline markets with their products (I know they were across random shops in very lower income areas) -> using up their capital to finance all this
- There was one time purchase behaviour, boosting metrics
- The products are known to be low quality. I think repeats just weren't there, without which you cannot continue to go down this path.
- The tide is going away, and they are caught swimming naked.
Making a lot of assumptionsbasis hearsay but quite possible, wdyt?
This 🙌🙌
I support Indian brands but dude, Mamaearth is one of the worst skincare products I have ever tried. Rest are somewhat mid at best, not worth the hype.
Absolutely agree! I tried Mamaearth once during its Influencer frenzy days and my hair fall increased like no one's business.. never touched the product again. It's one of the worst skincare brands with cheap quality products that rode the wave by burning money via marketing. Good thing is that market is correcting itself.
damn
With the 5% earnings growth for FY 25 and 30 PE (as it is a consumer brand) I expect the price will correct more. For me the fair price seems around 160. Also the anchor investors will be dumping the share as 1 year has completed 😬
The best is to know an employee to get their views they know their internal metrics. Many employees are selling now as they get to buy stock at cheap price later.
We should atleast name and shame the mutual funds who contributed to this pump and dump. Lots of smug mutual fund managers were acting holier than thou and saying things like we know better understand better