Honasa profit jumps as slower cost growth lifts operating margin
Revenue grew 23.15% year on year, while a lower tax rate and other income equal to 22.92% of pre-tax profit also supported net profit.
Filed 21 May 2026, 16:28 IST · after market close · Honasa Consumer Ltd (HONASA)
Key takeaways
- Consolidated net profit rose 177.98% year on year as expenses grew 14.47%, well below revenue growth of 23.15%.
- Operating margin expanded 6.69 percentage points year on year to 11.75%, but remained 5.00 percentage points below the 16.75% median for 26 reporting FMCG peers.
- The stock gained 6.62% after the results, slightly above its 5.89% median absolute move after the past eight results.
Price around the results
Revenue growth translated into a sharp profit increase
Consolidated revenue rose 23.15% year on year and 9.23% sequentially, while net profit increased 177.98% year on year and 38.33% sequentially. Expenses grew 14.47% year on year and 8.18% sequentially, so operating profit grew faster than revenue in both comparisons. Management said a change in Flipkart settlement accounting reduced reported revenue recognition by about Rs 25 cr without affecting absolute profitability.
Margin recovery continued, but profit quality needs monitoring
Operating margin widened 6.69 percentage points year on year and 0.86 percentage points sequentially because expenses grew more slowly than revenue. This was the third consecutive quarter of margin expansion, from 5.05% in Q3FY25 to 11.75% in Q4FY26. Other income contributed 22.92% of pre-tax profit, while the tax rate fell 7.20 percentage points year on year and 10.02 percentage points sequentially, both of which supported reported net profit.
Honasa still trailed the reported FMCG peer margin
Honasa's 11.75% operating margin was 5.00 percentage points below the 16.75% median among 26 Fast Moving Consumer Goods peers that had reported the same quarter. The company ranked seventh from the bottom on this measure. The gap persisted despite the sequential margin improvement.
Management pointed to Derma Co. and wider distribution
The presentation said The Derma Co.'s face cleanser business doubled year on year in Q4FY25 and that the brand was present in more than 6,000 modern trade outlets. Management also said offline distribution had been strengthened through more than 200 distributors in its top 100 cities. The company said its content engine uploaded more than 7,000 content pieces in a month.
The market reaction was above Honasa's usual post-result move
The stock gained 6.62% on the first trading day after the results and was up 8.53% on the following day. That initial move was modestly above the 5.89% median absolute move recorded after the past eight results, during which the stock rose six times and fell twice. Trading volume was 115.02 times the reference level on the first reaction day.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹657 cr | ₹602 cr | +9.23% | +23.15% |
| Other income | ₹19 cr | ₹16 cr | +18.28% | -9.68% |
| Expenses | ₹580 cr | ₹536 cr | +8.18% | +14.47% |
| Operating profit | ₹77 cr | ₹66 cr | +17.88% | +186.07% |
| Operating margin (%) | 11.75% | 10.89% | — | — |
| Interest | ₹3 cr | ₹3 cr | +3.10% | +5.05% |
| Depreciation | ₹11 cr | ₹11 cr | -2.17% | -13.04% |
| Profit before tax | ₹82 cr | ₹67 cr | +22.00% | +154.40% |
| Tax | ₹12 cr | ₹17 cr | -26.58% | +72.46% |
| Net profit | ₹69 cr | ₹50 cr | +38.33% | +177.98% |
| EPS (₹) | ₹2.13 | ₹1.54 | +38.31% | +176.62% |
Operating margin of 11.75% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +6.62% | +6.34% |
| Next session | +8.53% | — |
| 5 sessions | +11.75% | +12.90% |
| 15 sessions | +12.94% | — |
| 30 sessions | +28.95% | — |
Volume on the results session was 115.02× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The Derma Co.'s face cleanser business doubled year on year in Q4FY25.
Expansion
- The Derma Co. was present in more than 6,000 modern trade outlets.
New initiatives
- The company uploaded more than 7,000 content pieces in a month through its content engine.
- The company strengthened offline distribution through more than 200 satisfied distributors in its top 100 cities.
Competition
- The Derma Co. anti-hairfall shampoo achieved significantly higher likeability than the leading brand.
Problems & risks
- The Flipkart settlement change effectively netted off INR 25 crore of logistics and fulfilment costs in revenue recognition.
What to watch
- Whether operating margin holds above 11.75% after three consecutive quarters of expansion.
- Whether other income remains below its 22.92% share of pre-tax profit.
- Whether the Derma Co. expands beyond 6,000 modern trade outlets and the company maintains more than 200 distributors in its top 100 cities.