It wasn’t easy for Honasa founders Varun and Ghazal Alagh as shareholders fired on all cylinders when the Mamaearth’s parent sank into losses by the middle of FY25 after tasting profits in the previous fiscal year.

The beauty and personal care (BPC) company’s revenue increased 8% on-year to INR 2,066.9 Cr in FY25, but profits plunged 32% to INR 72.6 Cr.

Honasa Consumer turned cash flow negative with the topline crumbling 7% in the first six months of FY25, driving the company’s stock down 40%. Honasa slipped into INR 18.6 Cr losses in Q2 of FY25 after almost a year of reporting profits.

The company, however, picked up growth in the latter half of the fiscal year. Market analysts and brokerages too downgraded the ratings for Mamaearth for its muted earnings and loss of market capitalisation.

The company’s business strategy, marketing overdrive and product quality faced shareholders’ wrath after the setback, while its go-to market venture for offline retail, Project Neev, received backlash from superstockists and vendors who were distributing Mamaearth and other Honasa brand inventories to traders and retailers across the country.

The challenges deepened with a churn in the company’s top leadership, which involved chief business officer Zairus Master and chief product and technology officer Jayant Chauhan.

Honasa chairman Varun Alagh described FY25 as a year of learnings, focussed execution and necessary corrections. A round of revamp followed.

The revival measures seem to have started paying off for Honasa. The company delivered fairly good financials in the first quarter of FY26, with the net profit rising 2.4% to INR 41.3 Cr and operating revenue regaining 7% to INR 595.3 Cr. The Honasa shares rallied 14% in response a day after the earnings results. The appointment of retail veteran Yatish Bhargava as the chief business officer in June was also pivotal to the turnaround.

But the story doesn’t end there. In fact, it makes a new beginning, setting fresh challenges before the Alaghs to........

© Inc42