Honasa has disrupted traditional categories. In suncare, Honasa holds a 20% market share in the online channel driven by innovative product formats such as gel-based sunscreens suited to Indian climate and skintype-specific formulations. The category now contributes over Rs 5 billion in revenue.
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We hosted Honasa Day, which featured presentations from Varun Alagh (Co-founder and CEO), Ghazal Alagh (Cofounder and CIO) and team. Given the management conviction, the evolution in the business strategy and the strength in execution, we reiterate our high conviction positive stance on Honasa. Takeaways:
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Redefining strategy – balanced focus between ‘where to play’ and ‘how to play’. Earlier strategy enabled initial scale-up of brands digitally. The rebalancing should promote sustainable growth ahead.
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It shall continue to disrupt categories with innovative products/formats (serums, micro-needle serums) and take advantage as a first mover.
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Utilising AI/LLMs to analyse real-time digital trends, enabling faster product development and targeted customised marketing.
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Corrective actions to improve general trade execution are moving to direct distributors, reducing channel inventory, focusing on hero SKUs, and enforcing stricter cash collection norms to improve and measure channel health.
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Continue to invest in superior formulations, blind testing against competitors, and premium product launches.
Maintain Buy.
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