India's Honasa Consumer jumps after Citi starts with "buy"

Honasa Consumer

23/02/2024 07:32

** Shares of Mamaearth-parent Honasa Consumer  HONA.NS  jump
4.3% to 452.15 rupees after Citi starts with "buy"
    ** Citi sees rev CAGR of 25% from FY24-26, EBITDA to grow
55% as ad spend reduces and Mamaearth's offline channels expand
    ** Expects Honasa's newer beauty and personal care products
brands to repeat success of Mamaearth (~78% of FY23 sales) and
improve overall rev share
    ** Citi sets 550 rupees PT, valuing HONA at "rich" 55x
EV/EBITDA, but says it's justified given HONA can outgrow peers
    ** At least three other brokerages cover HONA, with 2 rating
it "buy" and 1 "underweight"; mean PT is ~498 rupees -LSEG data
    ** HONA stock up~ 37% since listing in November

 (Reporting by Nandan Mandayam in Bengaluru)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))