Back in 2023, Mamaearth was everywhere. The clean-label skincare darling had just gone public, riding the wave of India’s D2C boom. It had built a name around toxin-free ingredients, Instagram-friendly packaging, and a marketing playbook that mixed celebrity endorsements with algorithm-honed performance ads. For a moment, it looked unstoppable.
Fast forward to 2025, and the shine has worn off. The stock is down 56% from its peak. Valuations have deflated. And Honasa Consumer—the parent company behind Mamaearth—is now in the middle of a course correction that will determine whether this is a stumble or a structural reset.
By the numbers, the shift is clear.
As of April 2025, Honasa’s market cap stands at ₹7,717 crore. FY24 revenue came in at ₹1,764 crore with a net profit of ₹121 crore. But the real story is in the quarterly figures. Q3 FY25 showed signs of stabilisation—revenue grew to ₹536.7 crore, and net profit returned to the black at ₹26 crore after two consecutive loss-making quarters.
So what went wrong?
It started with a rapid shift in strategy. Mamaearth, which had thrived on online-first distribution, moved aggressively into offline retail. The transition wasn’t smooth. The company restructured its supply chain, moved away from super-stockists, and rolled out direct distribution in over 50 cities. This effort—internally dubbed Project Neev—aimed to create long-term efficiencies. But in the short term, it led to inventory pileups, loss of shelf space, and erratic revenue growth.
At the same time, the brand’s once-iconic positioning began to slip. Competition intensified as rivals like Minimalist, Pilgrim, and Plum began eating into its “natural and affordable” turf. Consumers—especially Gen Z—shifted toward more clinical, ingredient-focused brands. Mamaearth, with its broader mass appeal, started looking less differentiated.
What’s keeping the ship steady right now is not Mamaearth—but its younger siblings.
Brands like The Derma Co. and Aqualogica now account for over 40% of Honasa’s revenue. The Derma Co., in particular, has emerged as a high-growth engine, outpacing Mamaearth’s growth and maintaining stronger traction with online-first shoppers. This shift marks a quiet but important pivot—from a single-brand startup to a portfolio strategy.
Financially, there’s some improvement—but it’s still a work in progress. The company is debt-free and posted a return on capital employed of 19% in FY24. However, EBITDA margins remain tight. Q3 FY25 came in at 5%, down from 7% a year earlier. High marketing spends continue to eat into margins, with brand visibility a costly necessity in India’s hyper-competitive personal care market.
Then there’s the IPO hangover.
In late 2023, Honasa launched its much-anticipated IPO at a nearly $3 billion valuation. But just ₹14 crore in FY23 profits had investors questioning the math. At one point, Mamaearth was priced at over 1,000x earnings. A chunk of the proceeds went to early investors—including celebrities like Shilpa Shetty—rather than into business expansion. When the stock listed, it dropped sharply. And the scepticism hasn’t fully gone away.
To its credit, Honasa hasn’t stood still.
It’s leaning into quick commerce, which now accounts for 8% of revenue, up from 4-5% last year. Offline sales are recovering post the distribution overhaul. And the company is doubling down on chemist and modern trade channels to offset ecommerce volatility.
But the fundamental issue remains: valuation versus execution.
At over 100x P/E, expectations are sky-high. And while Derma Co. is growing fast, Mamaearth’s brand fatigue is hard to ignore. Honasa needs a clear path to double-digit margins and a stronger moat in its hero categories. Otherwise, it risks being seen as just another D2C fad in a saturated market.
So what’s the bottom line?
Mamaearth is no longer the story. Honasa is. The company has moved beyond a single-brand identity and is trying to build a long-term FMCG house. But that pivot needs better execution, tighter capital discipline, and sharper positioning in a crowded skincare market.
Until then, the brand will stay on shelves. But whether it returns to investor portfolios is still an open question.
