Honasa Consumer Ltd Q4 FY26 Earnings Call: Targets 500 bps EBITDA Expansion, Dr. Sheth’s Crosses Rs.100 Cr ARR

Honasa Consumer Ltd held its Q4 FY26 earnings call on May 21, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Revenue Growth Accelerates; Margins Expand

• Rs.682 Cr revenue— Q4 FY2025-2026 like-for-like revenue grew28%YoY, marking the third consecutive quarter of acceleration.
• EBITDA of Rs.77 Cr— margin came in at11.3%for Q4 FY26; gross margin expanded70 bpsYoY to71.4%.
• PAT of Rs.69 Cr— net margin reached10.2%for the quarter.
• Full-year FY26 revenue grew 20% YoY— full-year EBITDA margin stood at9.3%; full-year PAT wasRs.200 Cr.
• Dividend declared at Rs.3/share— representing ~50%of FY26 PAT, with a total cash payout of ~Rs.98 Cr, as announced by the Board.
• Focus categories grew 35% YoY— their contribution to revenue increased500 bpsYoY in Q4 FY26.

Mamaearth Holds Mid-Teens; Derma Co and Dr. Sheth’s Accelerate

• Mamaearth grew mid-teens in Q4 FY26— brand health hit a multi-quarter high; management expects Mamaearth to deliver a “double-digit CAGR over the next five years” (FY2026-2027 to FY2030-2031), driven by market share gains and distribution expansion.
• Derma Co (TDC) maintained double-digit EBITDA— face cleanser business nearly doubled; TDC achieved ~1%market share in GT face wash (Nielsen) in Q4 FY26; its last disclosed ARR wasRs.750 Cr+and continues to grow.
• Dr. Sheth’s doubled revenue YoY— crossedRs.100 CrARR in Q4 FY26, becoming the sixth brand in the portfolio to reach that milestone.
• Younger brands (ex-Reginal) posted 28%+ growth— in Q4 FY2025-2026, younger brands excluding the regional men’s brand accelerated, while core business like-for-like growth (excluding Reginal) was21%in the same quarter.
• Dermaco positioned as second marquee brand— management aims to make it aRs.1,000 Crbrand and stated it “could make the company the only one in recent decades to craft two Rs.2,000 Cr+ brands from scratch in India.”
• Aqualogica is ~2.5 years younger than Dermaco— management noted it is still in progression, with no specific ARR disclosed.

A&P Leverage and Cost Discipline Drive 400 bps OpEx Reduction

• Advertising spend grew ~6% in FY2025-2026— management expects this value to rise but decline as a percentage of revenue, generating A&P leverage over time.
• Other expenses fell to ~15% of revenue in Q4 FY26— on a like-for-like basis ~18%, down from ~22%in Q4 FY2024-2025, a real reduction of ~400 bpsfrom scale benefits (Flipkart settlement and GT charges removal contributed to the like-for-like adjustment).
• Three leverage levers identified— management cited channel/performance spends, brand spends, and operating expenses as the drivers for margin expansion.
• Reginal EBITDA impact was only 30 bps— in Q4 FY2025-2026, the regional men’s brand contributed minimal margin drag; the remainder came from the core business.
• Calibrated price hikes executed in Q1 FY2026-2027— to offset crude/raw material inflation, management raised prices selectively while keeping RPI competitive;no further hikes expected, but the quantum was not disclosed.
• Company remains negative working capital— management highlighted this as an ongoing structural characteristic of the business model.

Targeting 500 bps EBITDA Expansion on High-Teens Revenue CAGR

• Revenue growth target: high-teens CAGR— over the five-year horizon from FY2026-2027 through FY2030-2031, with annual fluctuations possible.
• EBITDA margin improvement of ~100 bps per year— management guided to a cumulative500 bpsexpansion over FY2026-2027 to FY2030-2031, building on the ~50 bps annual improvement commitment previously in place.
• Mamaearth distribution to expand from 200,000 to 500,000 outlets— over the next three to five years (through ~FY2029-2030 to FY2030-2031), management expects this to drive market share gains in focus categories like face wash and shampoo.
• Focus categories and young brands to lead FY27 growth— management stated that young brands and focus categories receiving >90%of investment are expected to be key growth drivers in FY2026-2027.
• New senior appointments (Sahil, Dheeraj, Mathur)— management noted these hires were made to drive the next growth horizon, without elaborating on specific roles.
• CEO Varun Alagh expressed expectation of improved results in Q1 FY2026-2027— in closing remarks, he thanked participants and signaled sequential improvement,though no specific financial guidance or metrics were provided for Q1.

Premiumization, Regional Expansion, and Innovation as Core Pillars

• Premiumization remains the core strategy— management reiterated that the company is targeting the emerging middle class and expects this trend to continue “for decades.”
• Regional men’s brand (acquired ~5 months ago)— originally98%sunscreen, management outlined three growth levers: (1) distribution expansion in Q1 FY2026-2027 (including Nykaa), (2) category expansion into face washes and serums, and (3) geographic expansion beyond South India into Maharashtra and other states; potential expected to play out over the next three to five years.
• New product launches contributed 7-8% to FY2025-2026 growth— management noted they now evaluate innovations over a three-year horizon and may share medium-term innovation trends from the next earnings call.
• Mamaearth online channel growing at double-digit rates— in Q4 FY2025-2026, offline growth was strong alongside sustained double-digit online growth.
• Men’s skincare and nutraceuticals treated as category extensions— management emphasized these are extensions of existing categories (e.g., sunscreen, face washes), not new unrelated complexity, and committed to building organization and profitability to capture those opportunities.
• Derma Co remains the largest actives brand in India— per Euromonitor and Nielsen data, as cited by management, with general trade (GT) channel among the fastest-growing channels.