- You missed the Honasa profit explosion, and your portfolio paid for it.
- Honasa Consumer posted a 93% YoY profit jump to Rs 50.2 cr, driving a 6% share rally.
- Revenue rose 16.2% to Rs 601.5 cr – the highest quarterly revenue in company history.
- Brokerage targets now range Rs 260‑384, reflecting confidence in double‑digit growth.
- SpiceJet’s Q3 loss of Rs 269 cr pushes its stock to a 52‑week low, highlighting sector volatility.
- Key takeaways: cost control, ad‑spend optimisation, and brand‑mix expansion are the new growth levers.
You missed the Honasa profit explosion, and your portfolio paid for it.
On Friday, Honasa Consumer (the parent of Mamaearth and other natural‑care brands) shocked the market with a 93% jump in consolidated profit for the December quarter of FY26, soaring to Rs 50.2 crore from Rs 26 crore a year earlier. The stock reacted instantly, opening with a 4% gap‑up and climbing over 6% in two consecutive sessions – its highest level since June 2025.
Honasa Consumer’s Record Quarter: What the Numbers Reveal
Revenue from operations surged 16.23% year‑over‑year to Rs 601.54 crore, eclipsing the prior‑year Rs 517.51 crore and marking the strongest quarterly topline in the company’s history. More importantly, the profit jump outpaced revenue growth, indicating a sharp improvement in operating efficiency.
Analysts attribute this to two core drivers:
- Cost control: Streamlined supply‑chain logistics trimmed COGS, lifting gross margins.
- Advertising optimisation: Data‑driven media spend shifted from broad‑reach TV to performance‑based digital, reducing customer acquisition cost (CAC) while preserving brand visibility.
These levers pushed the EBIT margin to roughly 8.3% in Q3, up from 5.9% twelve months ago – a margin expansion that rivals the sector’s best performers.
Why Honasa’s Margin Expansion Beats FMCG Trends
India’s FMCG sector has traditionally been a low‑margin, high‑volume arena, with average EBIT margins hovering around 6‑7% for mature players like Hindustan Unilever and ITC. Honasa’s 8.3% margin now sits comfortably above that benchmark, signaling a competitive edge.
Two macro trends are amplifying this advantage:
- Premium natural‑care demand: Consumers are willing to pay a 10‑15% premium for clean‑beauty products, boosting average selling price (ASP).
- Digital‑first distribution: Direct‑to‑consumer (D2C) channels cut middle‑man costs, a benefit that Honasa has leveraged through its robust e‑commerce platform and strategic tie‑ups with leading online retailers.
Competitors such as Tata Consumer Products and Marico are scrambling to emulate Honasa’s D2C playbooks, but scaling ad‑spend efficiency remains a hurdle. Honasa’s ability to keep CAC under 20% of revenue while growing top‑line at double‑digit rates sets a high bar.
SpiceJet’s Decline: Lessons for High‑Risk Play
While Honasa celebrated, SpiceJet tumbled, sinking 6.5% to a fresh 52‑week low after reporting a pre‑tax loss of Rs 269.27 crore for Q3 FY26, a stark reversal from a Rs 24.97 crore profit a year earlier. Total income slipped to Rs 1,522.81 crore from Rs 1,650.67 crore.
Key headwinds include:
- Grounded fleet costs escalating fixed‑cost burden.
- Rising aviation turbine fuel (ATF) prices, a variable expense that surged 12% YoY.
- Rupee depreciation adding foreign‑exchange strain on debt service.
- One‑time impact of new labour laws inflating personnel costs.
The airline’s experience underscores the volatility inherent in the aviation sector, where earnings are highly sensitive to fuel price volatility and regulatory shifts. For investors, SpiceJet’s slide serves as a cautionary tale: high‑beta stocks demand rigorous risk assessment, especially in a macro‑inflationary environment.
Sector Pulse: FMCG vs Aviation in FY26
FY26 has bifurcated consumer‑oriented sectors. FMCG, buoyed by rising disposable incomes and a shift toward health‑centric products, is delivering consistent double‑digit revenue growth and improving margins. By contrast, aviation grapples with cost inflation, fleet modernization pressures, and regulatory headwinds.
Historical context provides perspective: during the 2013‑14 period, India’s FMCG giants saw margin compression due to aggressive discounting, yet those that invested early in digital channels (e.g., Dabur) rebounded faster. In aviation, the 2008 fuel price shock wiped out profits for many carriers, and only those with hedging strategies survived.
Today, Honasa’s strategic focus on D2C and ad‑spend efficiency mirrors Dabur’s 2015 pivot, suggesting a repeatable growth pattern. Meanwhile, airlines lacking fuel‑hedge coverage are repeating 2008’s mistakes.
Investor Playbook: Bull vs Bear Cases for Honasa and SpiceJet
Bull Case – Honasa Consumer
- Continued double‑digit revenue growth driven by new brand launches (e.g., Mamaearth Baby, Forest Essentials extensions).
- Margin expansion sustained through AI‑enabled supply‑chain optimization, targeting EBIT margin >9% by FY27.
- Target price escalation: consensus of Rs 350‑Rs 384, implying 30‑45% upside from current levels.
Bear Case – Honasa Consumer
- Potential slowdown in ad‑spend efficiency if digital platforms increase CPM rates.
- Supply‑chain bottlenecks from raw‑material price spikes could compress margins.
- Valuation risk: current price‑to‑sales (P/S) at ~6x may be stretched if growth decelerates.
Bull Case – SpiceJet
- Successful restructuring of fleet and renegotiated ATF contracts could restore cash flow.
- Domestic travel demand rebound post‑COVID, supported by rising middle‑class consumption.
- Strategic alliance or equity infusion from a larger carrier could stabilize balance sheet.
Bear Case – SpiceJet
- Continued fuel price volatility eroding margins.
- Debt load exceeding Rs 12,000 crore, with limited refinancing options.
- Regulatory risk from new labour statutes increasing recurring costs.
In summary, Honasa Consumer stands out as a high‑conviction long‑term play within the FMCG arena, while SpiceJet warrants extreme caution or a short‑term tactical position for those comfortable with volatility. Align your portfolio allocation accordingly, and keep an eye on cost‑control metrics and ad‑spend ROI for Honasa, and on fuel‑hedge coverage and debt servicing for SpiceJet.