New Delhi: Indian skincare firm Mamaearth’s parent Hosana Consumer Pvt. Ltd. wiped off the market value by Rs 35 billion ($414.7 million) in market valuation in two sessions, if we talk about market valuation it can go wiped by the Hosana Consumer Pvt. Ltd. after the second quarter loss fanned demand concerns for the beauty products retailers. The Stock touched a record low of Rs 242.35 on Tuesday and has fallen by about 30% over the last two days. Its market cap has declined by a value of Rs 86 billion.
The sharp selloff was triggered after Hosana posted its first quarterly loss since listing in November 2023 late on Thursday, it joined a long list of Indian customer firms such as Hindustan Unilever and Nestle India to report downbeat this results quarter as urban customers spending in the face of high inflation. A challenging demand scenario and weaker-than-expected performance have hurt the company analysts JM Financial said by them.
Analysts said that Hosana, which competes with larger rival Nykaa and private players such as Health and Glow, was hurt by stiff competition in India’s beauty and personal care industry whose market size is nearly to hit $28 billion by 2025 from $17.8 billion in 2020, per Avendus data.
The competition has forced the company, also known for its Brands such as ‘The Drema Co’ and ‘Aqualogica,’ to rethink its business strategy said Arvind Singhal, chairman of consultancy firm Technopark Advisors. Hosana, which sells its products primarily through online platforms, has said in its post-earning call that it is planning to scale up its business by shifting its focus more to offline channels. Analysts of Citi said the move “needs refreshers”, and downgraded stock by two notches to a sell and buy.
The Brokerage also cited consumer’s shift to more active ingredient-based products and Natural-based products earlier. At least five analysts downgraded the stock after its results, while nine slashed their price targets per data compiled by LSEG.
