Shares of Honasa Consumer Ltd hit a 20% lower circuit to hit a 52-week low of Rs 297.25 on 18 November after the company announced its quarterly earnings for July-September. 

One of India’s leading digital-first beauty and personal care (BPC) company reported a net loss of Rs 19 crore for the quarter compared to Rs 29 crore net profit reported in the same quarter last year. The net loss during the quarter was attributed due to weak operational performance of the company. 

The revenue from operations of the company during the quarter stood at Rs 462 crore, marking a 6.9% year-on-year (YoY) decline from Rs 496 crore reported in the same quarter of the previous fiscal year. 

The decline during the quarter was also due to the company’s ongoing transition to a direct-to-consumer (D2C) distribution model, which is part of its project ‘Neev’ that has necessitated inventory corrections.

The total expenses of the company grew by 9% YoY to Rs 506 crore, despite a sequential decline. 

The company said, “Over the past few months, we’ve been implementing Project Neev to optimise our distribution model. In this quarter, we have taken strategic steps towards transitioning from super-stockists to direct distributors in top 50 cities. This transition has impacted our revenue and profits, leading to a slowdown for Mamaearth.”

At 11:52 am, the shares of Honasa Consumer were locked 20% lower at Rs 297.25 on NSE.

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