Honasa Consumer Ltd.

SPARK INSTITUTIONAL EQUITIES PRIVATE LIMITED
Spark Institutional Equities Pvt. Ltd. is a SEBI registered Research Analyst bearing SEBI Registration No. INH200009722
CONSUMER
DRHP Analysis
HONASA CONSUMER LTD.

DRHP Analysis & Key Thoughts
RESEARCH ANALYTS
Tejash Shah
 [email protected]
 +91 22 6176 6802
Santoshkumar C
 +91 44 6660 3037
Ranganathan V S
 +91 44 4344 0060
 Analyst Certification and Required Disclosures begin on last two pages – Click here
As we prepare to share our insights on Mamaearth (HONASA) DRHP, we can't marvel enough about the fact that it was founded as recently as 2016.
To provide an in-vogue context here, the Cricket World Cup in 2023 would be only the second one since HONASA's inception. In our view, HONASA DRHP Analysis
represents the convergence of two strong mega-trends – i) the emergence of Digital First Brands ecosystem and ii) growing need for natural/efficacy- 25 SEPTEMBER 2023
based FMCG products. Obviously, we cannot overemphasise the importance of execution prowess. The past decade witnessed a transformation in Index Performance (%)
the B2C landscape. Traditionally strong moats, such as brand recognition, and distribution networks, have been neutralized by the surge in online
1m 3m 12m
retail, the emergence of social media, and the availability of patient capital. This level playing field allowed newcomers like Mamaearth to challenge
the established players. NSEFMCG -1% -1% 16%
Similarly, in the FMCG sector, consumer preferences have shifted significantly over the last 10-15 years towards natural, effective, and trustworthy NSECON 2% 3% 6%
products. Globally, brands such as Patanjali, Honest Company (founded by Jessica Alba), and others with unique propositions have attempted to fill SENSEX 2% 4% 11%
this gap. Likewise, HONASA, since its inception in 2016, effectively identified and addressed this need. As it transitions from a single brand to a
HOUSE of Brands company, bolstered by expected fresh capital, a new chapter unfolds in the company's journey.
Digital-first brands – Shooting stars in the Indian BPC market: Among all consumer categories in India, the BPC segment has seen a surge in digital-first
brand launches in the last decade, attracted by several favourable aspects of the industry. Avendus SPARK's bottom-up aggregation of nearly 60 BPC
companies indicates that legacy companies (such as HUVR, CLGT, MRCO, etc.) still wield strong influence in the sector, controlling a significant share of
the industry and shaping its growth trajectory. Currently, the share of digital-first brands remains in the high single digits at best. While many of these
brands have experienced remarkable growth trends in recent times, albeit from a low base, it is unlikely that the dominance of legacy companies would
be challenged in the medium-term. However, we anticipate that a select few digital-first brands would continue to grow and eventually join the league of
large legacy companies.
Honasa Consumer – Clear winner among digital-first BPC brands: Among digital-first brands in the Indian BPC segment, Honasa Consumer emerges as
the clear winner in various aspects. Mamaearth, initially focused on baby care products, has successfully evolved into a full-fledged BPC brand. Led by
agility in innovation and foray into various BPC categories, Honasa has become the fastest-growing company in the segment, achieving a top line of over
Rs. 10bn in just six years. Amid this exponential growth, Honasa stands out from other digital-first brands with its high gross margin stability, operational RESEARCH ANALYSTS
profitability over the past two years, lower CAC (A&P spends), and better revenue throughput for the capital invested. Tejash Shah
Tracking the path to Success: Embarked upon by a husband-wife duo with complementary skills, Mamaearth's origins lie in their shared commitment to [email protected]
+91 22 6176 6802
addressing broader consumer issues, drawing from their experiences. Their adept use of brand communication quickly attracted a large number of
customers. By consistently delivering on its promise of quality, Mamaearth earned trust within its target audience. Recognizing a product gap and Santoshkumar C
[email protected]
successfully engaging consumers through a strong marketing narrative, the founders demonstrated their ability to transform the business into a full- +91 44 6660 3037
fledged BPC company. The drivers of their success are as follows: a) Proficiency in identifying consumer insights by harnessing technology & data, b)
Ranganathan V S
Swift development of innovative, high-quality products driven by efficacy, c) Crafting a compelling marketing narrative, and d) Establishing a purpose- [email protected]
driven brand from the early stages. +91 44 4344 0060
find AVENDUS SPARK RESEARCH on Bloomberg [RESP SPAK <go>] | FACTSET | REFINITIV EIKON Page 2
Road ahead – Sustaining growth momentum, Path to High Profitability: While past brand successes like Patanjali in India and The Honest Company in
the US initially faced difficulties in scaling up beyond a certain level, Honasa Consumer, having evolved into a comprehensive BPC brand with a sizeable
scale, appears to have surmounted these early challenges. Mamaearth can continue to outgrow the industry over the medium-term led by distribution
expansion in offline channel (attracting more users) and increasing wallet share & repeat customers (new category foray and thrust on innovation). The
company's House of Brands strategy is particularly intriguing, as it provides a sustained avenue for high growth, the opportunity to expand the business,
widens the customer base, and the ability to leverage established operational excellence across brands. The operating margins, which are in the low to
mid-single digits currently, are likely to expand driven by judicious A&P spends, as brand equity strengthens, and operating leverage as the business
continues to scale up.
Risks/Concerns: a) Expanding the business in the offline channel presents formidable challenges, especially when competing with well-established
legacy competitors. This shift poses unique difficulties compared to the online business model. b) While the management has exercised caution in its
House of Brands strategy, particularly in brand acquisitions, the simultaneous management of multiple emerging brands carries inherent risks and could
disrupt the envisioned path to profitability. c) Foraying into the salon business, despite measured capital infusion, represents uncharted territory for the
company. Given its relatively high capital-intensive nature, achieving profitability may prove challenging in the medium term.
find AVENDUS SPARK RESEARCH on Bloomberg [RESP SPAK <go>] | FACTSET | REFINITIV EIKON Page 3
HONASA CONSUMER LTD. – DRHP Analysis & Key Thoughts
Key Highlights of the note
Analysis from Avendus SPARK’s bottom-up

aggregate of 59 BPC companies
Key takeaways from Avendus SPARK Consumer survey
Analysis of Honasa Consumer vs. Other

digital-first BPC brands (slide 30, slide 31, slide 33)
Path to High Profitability, Crystal Gazing –

revenue, margins, valuation (slide 39, slide 40)
Page 4
HONASA – High-growth & Profitable House of Brands
1. Company Overview
2. Business Overview
3. Financial (forensic) Analysis
4. Management & Corporate Governance

Company Factsheet
Particulars Details
Established in 2016, Mamaearth is the flagship brand that focuses on developing toxin-free beauty products made with natural ingredients. Initially introduced as a natural ingredients-
led baby care brand with products inspired by traditional DIY beauty recipes, Mamaearth was aimed at parents who were increasingly concerned about the ingredients used in baby
Company Background products. Mamaearth’s product offerings have since extended beyond baby care products and is now an established BPC platform brand with products across baby care, hair care, face
care, body care, color cosmetics, and fragrances.
Honasa Consumer has six brands in their portfolio, namely, Mamaearth, The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s, to build a ‘House of Brands’ architecture. Under
Product Portfolio
their flagship brand ‘Mamaearth’ they have various categories covering Hair Care, Skin Care, Body Care, Beauty and Baby Products.
▪ Omni channel presence: In FY22, the online channel contributed to ~70% of sales (1HFY23: ~59%) & offline channel contributed to ~29% (1HFY23: ~35%) with an estimate to have
retailed products through 112,868 FMCG retail outlets in India. They also have 35 EBOs exclusively retailing Mamaearth Products.
▪ Warehousing: 11 warehouses, 3 directly managed & 8 outsourced to 3rd parties
Operational Strength ▪ Diverse Portfolio: Mamaearth – Toxin-free & natural ingredients across hair, skin, body, beauty & baby products. The Derma Co. – Science-backed products with active ingredients
for skin & hair. Aqualogica – Hydrating skincare for Indian skin types. Ayuga – Ayurvedic beauty products in modern formats. BBlunt – Salon services & hair care/ styling products to
enable a salon like experience at home. Dr.Sheth’s – Bio-actives-based skincare.
▪ Expansion: Estimated to have delivered services across 718 districts & 18,323 pin codes (~94.94% of total pin codes)
▪ Mr. Varun Alagh (Chairman, Whole-time Director, and Chief Executive Officer): Prior to founding Mamaearth, Varun worked across marquee companies in India such as Hindustan
Unilever Limited, Diageo India Private Limited, and Coca-Cola India Private Limited.
▪ Ms. Ghazal Alagh (Whole-time Director and Chief Innovation Officer): worked with NIIT and operated dietexpert.in, an independent commercial operation.
Management Depth
▪ Mr. Raman Preet Sohi (Chief Financial Officer): Joined in April 2020, He holds a bachelor’s degree in commerce from Panjab University, Chandigarh, and a post-graduation diploma
in management in international business from Symbiosis Institute of Management Studies, Pune. Previously, he worked with Drums Food International Private Limited as the Chief
Financial Officer and also had a long stint in Dabur.
History of Capital Infusion The company has raised capital of Rs.6,554mn from various investors including the likes of Fireside Ventures, Stellaris, Sofina, Sequoia Capital, Evolvence India etc.
The Net Proceeds of Rs. 4,000mn are proposed to be utilised in the following manner:
1. Advertisement expenses towards enhancing the awareness and visibility of brands (Rs.1,860mn)
Fund Raise Details 2. Capital expenditure to be incurred for setting up new EBOs (Rs.342mn)
3. Investment in Subsidiary, BBlunt for setting up new salons (Rs.275mn)
4. General corporate purposes and unidentified inorganic acquisition (To be determined upon finalisation of the Offer Price)
Bankers HDFC Bank Limited, Kotak Mahindra Bank
Book Running Lead ManageRs. Kotak Mahindra Capital Company Limited, JM Financial Limited, Citigroup Global Markets India Private Limited, J.P. Morgan India Private Limited
Auditors S.R. Batliboi & Associates LLP

Source: DRHP, Company website, News articles, Avendus Spark Research Page 6
Operational Timeline of Honasa Consumer
2016 2021
2018
Launched its flagship ▪ Raised funding led by Sofina
▪ Ms. Shilpa Shetty
brand Mamaearth
Kundra invests in the ▪ Launched Aqualogica –
which focuses on
Company hydrating skincare brand
developing toxin-free
baby products made designed for Indian skin types
▪ Raised funding led by
with natural ▪ Launched 1st EBO for
Stellaris
ingredients Mamaearth
2022
▪ Launched Ayuga – ayurvedic
products in easy-to-use,
2017 2020 modern formats for Indian ▪ Acquired BBlunt – professional
millennials hair care & styling products
▪ Launched ‘The Derma enabling salon-like experience at
▪ Acquired Momspresso – a
Co.’ – science-backed home
Raised capital led by content platform providing
Fireside Ventures products powered with meaningful and relevant ▪ Acquired Dr. Sheth's – A bio-
active ingredients content to women actives based skincare by three
▪ Raised funding led by generations of skin specialist
Sequoia ▪ Launched ‘Mamaearth x Femina
▪ Crossed annual revenue Beautiful Indians’ campaign to
of Rs..1,000 million in recognise & reward acts of
FY20 goodness in society
Source: DRHP, Company website, News articles, Avendus Spark Research

Funding Timeline – Honasa has raised a total equity capital of Rs.6.5bn so far since inception
Business
Funding Raised Face Value
Timeline Investors Valuation (Rs.
(Rs. mn) (Rs.)
mn)
Equity Capital Raised
September, 2016 9,000 Equity Shares to Varun Alagh, 1,000 Equity Shares to Ghazal Alagh 0.1 10 na
May, 2018 Allotment of 290 equity shares to Shilpa Shetty Kundra 8 100 na
September, 2018 100 Equity Shares each to Stellaris and Fireside Ventures Fund 11 10 1,315
September, 2022 Allotment to Shilpa Shetty Kundra 60 10 81,653
Total 79
Preference Capital Raised
December, 2016 Class A NCCPS: 233 Fireside Ventures Trust, 116 each to Suhail Sameer, Vijay Nehra and Shashank Shekhar 8 10 312
August, 2017 Class B NCCPS: 1,347 to Fireside Ventures Fund and 269 each to Kunal Bahl and Rohit Kumar Bansal 49 10 624
Class C NCCPS: 2,131 to Stellaris, 1,780 to Fireside Ventures Fund, 734 to Rishabh Harsh Mariwala and 100
September, 2018 264 10 1,315
each to Kunal Bahl and Rohit Kumar Bansal
Class D NCCPS: 363 each to Fireside Ventures Fund and Stellaris, 3,346 to SCI VI, 65 to Rishabh Harsh
January, 2020 1,290 10 7,480
Mariwala and 24 to SCI Trust
July, 2021 656 Class E NCCCPS to Sofina 1,472 10 54,123
July, 2021 Class E NCCPS: 164 to Evolvence India Fund III Ltd and 82 to SCI VI 552 10 54,123
December, 2021 Class F NCCPS: 839 Class F NCCCPS to SCI III 2,840 10 81,655
Total 6,475
Total Capital Raised 6,554

NCCPS - Non-cumulative compulsory convertible preference shares; Each NCCCPS is convertible into 12,900 Equity Shares; The conversion of the outstanding 581 Class A NCCCPS, 1,885 Class B NCCCPS, 4,845 Class C NCCCPS, 4,161 Class D NCCCPS, 902 Class E NCCCPS and 839
Class F NCCCPS will be completed prior to the filing of RHP; Source: DRHP, Avendus Spark Research Page 8
Secondary Funding Timeline – The promoters have raised Rs. 1.1bn so far through secondary sale
Issue price/ transfer

Number of shares Nature of
Timeline Nature of transaction price per equity Deal size (Rs. mn)
allotted/ transferred consideration
share (Rs.)
Varun Alagh
Sep-16 Allotment pursuant to subscription to the Memorandum of Association 9,000 Cash 10 na
Jan-20 Transfer to SCI VI 400 Cash 263,576 105
Jan-20 Transfer to Stellaris 43 Cash 263,576 11
Jan-20 Transfer to Fireside Ventures Fund 43 Cash 263,576 11
Sep-21 Transfer to Vishal Agrawal 15 Cash 2,019,326 30
Jan-22 Transfer to SCI III 191 Cash 3,385,049 647
Mar-22 Transfer to Sofina 26 Cash 3,385,049 88
May-22 Bonus issue in the ratio of 1:12,899 106,829,518 na na na
Sep-22 Transfer to Mukesh Alagh* 50,000 na Gift na
Sep-22 Transfer to Jaspal Alagh* 50,000 na Gift na
Dec-22 Transfer of 10 equity shares each to 15 employees 150 na Gift na
Total capital 893
Ghazal Alagh
Sep-16 Allotment pursuant to subscription to the Memorandum of Association 1,000 Cash 10 na
Mar-21 Transfer to Sofina 212 Cash 1,088,755 231
May-22 Bonus issue in the ratio of 1:12,899 10,164,412 na na na
Sep-22 Transfer to Sunita Sahni* 100,000 na Gift na

Total capital 231
Total secondary sale by promoters 1,124
*part of promoter family; Source: DRHP, Avendus Spark Research Page 9

Corporate Structure
Launch: 2016 Launch : 2020 Launch : 2021 Launch : 2021
Standalone Operations Ayurvedic beauty products

Flagship brand; Toxin-free Science-backed products
Hydrating skincare designed in easy-to-use, modern
beauty products made with powered with active
for Indian skin-types. formats for Indian
natural ingredients. ingredients.
millennials.
PT Honasa Consumer Honasa Consumer General

Just4Kids Services Pvt. Ltd. Bhabani Blunt Hairdressing Fusion Cosmeceutics Pvt.
Indonesia (“Honasa Trading LLC (“Honasa
(“Just4Kids”) Pvt. Ltd. (“BBlunt”) Ltd. (“Fusion”)
Indonesia”) General Trading”)
Subsidiaries Date of Acquisition: Dec-21 Date of Acquisition: Mar-22 Date of Acquisition: Apr-22 Date of Acquisition: Feb-22 Date of Acquisition: Jun-22
Shareholding: 76.7% Shareholding: 100% Shareholding: 100% Shareholding: 100% Shareholding: 100%
engaged in the business of engaged in the business of

trading BPC products trading BPC products
B:Blunt-Spratt Hairdressing
Pvt. Ltd. (“B:Blunt Spratt”)
Step-down Subsidiaries Questions for the management
engaged in the business of
running beauty parlours, hair 1. What is the current status of Momspresso & MyMoney platforms which were
cutting salons acquired in the recent past?
Source: DRHP, Annual report, MCA fillings, Avendus Spark Research Page 10
Shareholding & Dilution: ~15% of current shareholding is on offer through OFS

No. of equity
% shareholding
Name of No. of equity % equity No. of NCCCPS shares post No. of equity % of holding on % Shareholding
(fully diluted
Shareholder shares held shareholding held NCCPS shares on offer offer post IPO offer
basis)
conversion^
Varun Alagh 106,737,650 78.3 0 106,737,650 34.3 3,186,300 3.0 33.3
Ghazal Alagh 10,065,200 7.4 0 10,065,200 3.2 100,000 1.0 3.2
Mukesh Alagh 50,000 0.0 0 50,000 0.0 0.0
Jaspal Alagh 50,000 0.0 0 50,000 0.0 0.0
Sunita Sahni 100,000 0.1 0 100,000 0.0 0.0
Total promoter group 117,002,850 85.8 0 117,002,850 37.6 3,286,300 2.8 36.5
Selling shareholders
Fireside Ventures 1,844,700 1.4 2,363 32,327,400 10.4 7,972,478 25 7.8
Stellaris 1,844,700 1.4 2,148 29,553,900 9.5 12,755,965 43 5.4
Sofina 3,302,400 2.4 2,034 29,541,000 9.5 19,133,948 65 3.3
Rishabh Harsh Mariwala 0 0.0 707 9,120,300 2.9 477,300 5 2.8
Evolvence India Fund III 1,315,800 1.0 164 3,431,400 1.1 862,987 25 0.8
Kunal Bahl 0 0.0 185 2,386,500 0.8 777,672 33 0.5
Rohit Kumar Bansal 0 0.0 185 2,386,500 0.8 777,672 33 0.5
Shilpa Shetty Kundra 1,623,635 1.2 0 1,623,635 0.5 554,700 34 0.3
Evolvence India Coinvest 877,200 0.6 0 877,200 0.3 220,613 25 0.2
Non-Selling shareholders
SCI VI (Sequoia) 5,160,000 3.8 4,298 60,604,200 19.5 19.5
SCI III (Sequoia) 2,850,900 2.1 872 14,099,700 4.5 4.5
Others 514,151 0.4 257 3,829,451 1.2 1.2
Total 136,336,336 100 13,213 311,177,793* 100 46,819,635 15 85
Êach NCCCPS is convertible into 12,900 Equity Shares; *calculated based on promoters’ effective shareholding at 37.6% post conversion of NCCPS as per DRHP ; Source: DRHP, Avendus Spark Research Page 11
Objects of the IPO – Rs. 4.0bn to be raised for Ad expenses, capex plans & general corporate expenses
Object of the issue (Rs. mn) Total FY24 FY25 FY26 1 ~70% of Ad expenses will be towards TV campaigns
1 Advertisement expenses 1,860 570 620 670 (Rs. mn) Total FY24 FY25 FY26 %
Capex to set up EBOs 342 109 114 120 Advertisement Expenses 1,860 570 620 670
2
TV campaigns 1,285 400 430 455 69%
3 Capex to set up BBlunt salons 275 92 96 87
Digital spends 331 100 111 120 18%
4 General corporate purposes & unidentified inorganic acquisition 1,523
Influencer spends 165 50 55 60 9%
TOTAL 4,000 770 830 877 Visibility spends 79 20 24 35 4%
2 132 EBOs to be set up at a capex of Rs.1.42mn per store with an avg. size of 350 sq. ft. 3 Rs. 275mn would be used for setting up 20 BBlunt Salons at a capex per store of Rs. 11.8mn
Capex for EBOs (Rs. mn) Total FY24 FY25 FY26 Capex for BBlunt Salons (Rs. mn) Total FY24 FY25 FY26
Total no. of EBOs to be setup 132 44 44 44 No. of BBlunt salons to be set up 20 7 7 6
Total Capex for EBOs 342 109 114 120 Total Capex to set up salons 275 92 96 87
Capex for stores 197 62 65 69
Capex for stores 248 83 87 78
Security deposits for stores 146 46 49 51
Security deposits for stores 28 9 10 9
Proposed Capex incurred so far
Per store metrics
capex 35 stores* per store • Have nine salons across India
Avg. store size (sq.ft) 350 • Propose to set up 20 new salons at a total cost of Rs. 275mn
• Average salon size: 2,500 sq ft
Avg. capex per store (Rs. mn) 1.42 19.3 0.55
• Avg. capex for a store: Rs. 11.81mn
Avg. security deposit per store (Rs. mn) 1.05 25.5 0.73 • Security deposit rate: Rs. 525 per sq ft
• Avg. security deposit for a store: Rs. 1.31mn
Questions for the management
1. Reason for a big difference between the proposed capex/security deposit per store vs. Questions for the management
capex/security deposit incurred so far for the existing 35 stores?
2. Reason for very high security deposit of Rs. 3,000 per sq. ft. vs. other premium retailers? 1. Reason for lower security deposit of Rs. 525 per sq. ft. vs. Rs. 3,000 for EBOs?
3. Will these 132 EBOs be set up across brands including The Derma etc. or will it be exclusively for the 2. Which are the states/cities considered for setting up these salons?
mamaearth brand?
âssuming the capex & security deposit spent in FY22 & 1HFY23 to be total amount spent for the existing 35 EBOs; Source: DRHP, Avendus Spark Research Page 12
Financial Performance – Robust topline growth, strong offline channel diversification, stable GM and positive EBITDA/PAT margins
Exponential growth in revenue from operations over the last few years Strong diversification into offline channels & contributes ~40% to current product sales
Revenue (Rs.mn)
~14,500 9%
19%
29% 37%
Rs. 1bn to ~Rs. 15bn ~1.5x
(~15x) in just 3 years 9,435
~2x 7,227 91%
81%
71% 63%
4,600
~5x
1,098
2 53 168 FY20 FY21 FY22 1HFY23
FY17 FY18 FY19 FY20 FY21 FY22 1HFY23 FY23e Online (marketplace + DTC) Offline
Source: MCA Filings, DRHP, Avendus Spark Research; FY23e based on annualized 1HFY23 numbers Source: DRHP, Avendus Spark Research
Gross margins sustained above ~70% over last 2.5 years EBITDA margin* turned positive since FY21 Net profits* also tuned positive since FY21
7,0 00 71.2% 6,600 72. 0% 300
5.9% 1.2% 1.9% 20. 0% 400
8.0% 20. 0%
70.6% -7.9% 0.5%

-7.1% 0.0 %
350
-6.4% 0.0 %
272 368
250
6,0 00
68.6% 70. 0%
-26.5% -3.8% 1.5%
70.0% 5,100 -20.0%
300
-20.0%
-20.8%
200
5,0 00
139
250
66.4%
68. 0% -40.0% -40.0%
66.5% 150
115 200
4,0 00
3,273 -60.0%
144 -60.0%
64.7% 66. 0% 100
-80.0%
150
-80.0%
3,0 00
100
50
64. 0% -100.0%
50
37 -100.0%
2,0 00
-120.0% -120.0%
730 -3 -4 0
1,0 00
62. 0%
-50
-3 -3
36 109
-140.0% -140.0%
1 -134.9% -45 -42

-50
-135.0% -35
0 60. 0% -100
-78 -160.0% -100 -160.0%
FY17 FY18 FY19 FY20 FY21 FY22 1HFY23 FY17 FY18 FY19 FY20 FY21 FY22 1HFY23 FY17 FY18 FY19 FY20 FY21 FY22 1HFY23
Gross Profit (Rs.mn) Gross Margin (%) EBITDA (Rs.mn) EBITDA Margin (%) PAT (Rs. mn) PAT Margin (%)
Source: MCA Filings, DRHP, Avendus Spark Research *Reported margin including ESOP costs; Source: MCA Filings, DRHP, Avendus Spark *Adj. PAT excluding change in fair value of preference shares; Source: MCA Filings, DRHP,
Research Avendus Spark Research
Page 13
Financial Performance – Favourable WC cycle, improving return ratios, healthy cash flow conversion & strong cash balance
Favourable WC cycle in line with incumbent FMCG players driven by D2C channel With improvement in margins, return ratios turned positive over the last 2 years
Net WC
20. 0%
18%
6 8 -4 -12 9
Days
2.3 0
15. 0%
30 10. 0%
2.17 1.64 1.8 0
45 31
33 25
Debtor Days 57 2% 3% 3%
2%
5.0 %
35 27 28 36 na*
1.3 0
na*
Inventory Days 0.0 %
-73 -64 -66 -57 1.13 0.8 0
Creditor Days -82 -5.0%

-3%
0.56 0.70 0.3 0
-10.0%
FY19 FY20 FY21 FY22 1HFY23 -15.0%

-12% -12% -0.20
FY19 FY20 FY21 FY22 1HFY23

1.Is there any seasonality in the WC requirement of the business?
Questions for the management 2.Will Debtor days continue to increase as saliency shifts more
ROE (%) ROCE (%), pre-tax Total Asset Turnover
towards offline GT/MT channels?
Source: MCA Filings, DRHP, Avendus Spark Research *ROE is na for FY20/21 given negative networth in those years; Source: MCA Filings, DRHP, Avendus Spark Research
Healthy positive cash flow conversion in FY21/22; however, turned negative in 1HFY23 Nil external debt and healthy cash on books adds comfort
446 432
5,157
297 287
4,379
-7 -11
-104 1,914
-108 1,510
853
596
289 203
0 4
-656
-699
FY19 FY20 FY21 FY22 1HFY23 FY19 FY20 FY21 FY22 1HFY23
OCF (Rs. mn) FCF (Rs. mn) Total Debt (incl. Lease Liabilities) (Rs.mn) Cash (incl. investments) (Rs.mn)
Source: MCA Filings, DRHP, Avendus Spark Research Source: MCA Filings, DRHP, Avendus Spark Research
Page 14
Operational Metrics (1/2)
No. of units sold (mn) Realisation per unit (Rs.) Contribution of Top 10 & 2 products at ~30% & ~13% resp.
38%
45.0
249 30% 31% 31%
~10x in 237
36.4 207
2 years 188
12% 14% 13% 13%

18.5
4.6
FY20 FY21 FY22 1HFY23
FY20 FY21 FY22 1HFY23 FY20 FY21 FY22 1HFY23 Top 10 products Top 2 products
High retention rate with ~50% repeat customers in DTC Honasa has mid single-digit market share in Online BPC segment With no own manufacturing facility, vendor concentration
channel will be crucial
26.4%
82%
76%
71%
57%
DTC Channel
5.3% 3.8%
3.4%
43% 52%
Marketplace Total DTC Face-wash
Online category FY20 FY21 FY22 1HFY23
FY22 1HFY23 Market share by channel/category for CY21/FY22 Contribution from Top 3 vendors, %
Questions for the management
1. Reason for continuous fall in realisation per unit volume since FY21? Is it due to the introduction of lower-value packs in offline channels & could it decline further as offline channel saliency increases?
2. With ~50% repeat customers in mamaearth’s DTC channel, what is the purchase frequency of this cohort of customers vs. the average customer base?
3. Would you look at adding our own manufacturing facility sometime in the future as scale increases?
Source: DRHP, Avendus Spark Research Page 15

Operational Metrics (2/2)
Pan India distribution of volumes across channels Total
WAREHOUSING
Managed by 3rd party
North
31.7% East
Managed by own
17.2%
3 8 11
Warehouses as of 1HFY23
No. of Revenue/Metric*
DISTRIBUTION
Retail Outlets 112,868 ~Rs. 38,540
OFFLINE
Pincodes served Districts Served Tier 2+ cities
West
26.8% Distributors 449 ~Rs. 9.7mn
1HFY23 18,323 718 45.9%
South
24.4% MT Chains 30 ~Rs. 38.7mn
FY21 24,817 - 64.0%
Domestic volumes split City EBO count^
No. of EBO’s
FY22 27,800 -
New Delhi 9
Gurgaon 5
Chandigarh 1
Noida 3
35 79 123 167 Mumbai 3
No. of consumers FY20 FY21 FY22 FY23 Ghaziabad 4
EBO’s & SALON

Unique transacting consumers (mn) 5.2* 5.3 5.6 8.0 10.0 1HFY23 FY24E FY25E FY26E Total 25
Monthly Avg. unique visitors (mn) 6.2** 12.0 14.0 19.0 23.0
No. of BBlunt Salons
City Salon count^
Bangalore 6
Influencer content led marketing FY22 1HFY23 FY22 FY23 Mumbai 5
No. of Beauty Advisors - 1,388 479 522 Kolkata 4
No. of Influencers 2,915 3,958 5,403 6,900+ Hyderebad 1
9 16 23 29
Influencer/Beauty Advisor Expense, Rs mn 26 55 114 541 Total 16
as % of sales 0.3% 0.8% 0.3% 1.1% 1HFY23 FY24E FY25E FY26E
*from Apr’19 to Sep’22; ** for 6-month period from Apr’22 to Sep’22 in mamaearth website & app; *based on assumption that ~30% & ~8% of FY23P sales had come through GT & MT channel respectively; ^ city-wise count based on
Source: DRHP, Company Filings, Avendus Spark Research information available in respective websites; Source: DRHP, Company Filings, Avendus Spark Research
Page 16
1. Company Overview

Online channel reaching a sizeable scale of ~14% in the Indian BPC market of Rs. 1.3tn as of CY21
Overall BPC Market Size (Rs.bn)
Overall BPC
market (CY21)
905 1,282 1,103 1,289 2,400

Online BPC has growth
Offline is the dominant 50%+ CAGR from ~2% to
2016 2019 2020 2021 2026e
Offline Online channel with ~86% ~14% of overall segment
saliency in last 5 years
~86% ~14%
Offline Market Online Market
672
Other
GT 180
Brands 77 88
~67% 887 1,205 1,107 1,728 18
~12%
2016 2019 2021 2026e 2016 2019 2020 2021 2026e
Unorganised (GT) Organised (MT)

MT DTC
Marketplace
~18% ~2% 1,128
89% 85% 83% B2C DTC
910 869
697 600
190 295 238 11% 15% 17%
2019 2020 2021
2016 2019 2021 2026e 2016 2019 2021 2026e Digital Brands Other brands Marketplace B2B

Excluding categories where Honasa doesn’t have a strong presence, we estimate core TAM to be ~Rs. 1tn within BPC for Honasa as of CY21
Segmentation of BPC by price points Segmentation of BPC market by categories Segmentation of BPC market by city tiers
61% 6%
57% Hair Care
55%
47% 13% 28%
45% Bath & Body
42% 47% 47%
36% 36% Face Care
33%
6%
Makeup 19%
21% 21%
7% 8% 9% Fragrance
6% 7% 39% 32% 32%
Oral Care
2016 2019 2021 2026e 23%
15% Wellness 2016 2019 2021
Mass Masstige Premium Metro Tier-1 Tier-2+
Presence of Honasa across all segment of BPC market

Core TAM for Honasa within BPC Market (Rs bn)
Offline Online
Channel GT MT DTC Marketplace Excluding categories of Fragrance, Oral & 1,111 2,400
Wellness where Honasa does not have a
greater presence currently, Core TAM for 230
Honasa reduces to Rs. 0.97tn vs. Rs. 1.3tn 552
Mass Masstige Premium as of CY21
Price Point 881
1,289
Metro Tier-1 Tier-2+
Town 322
1,848
Hair Body Face Makeup
967
Category
Fragrance Oral Wellness
Current TAM in CY21 TAM Growth by CY26 Potential TAM in CY26

We estimate BBlunt Salon services could not add significantly to the TAM but can value-add to BBlunt’s product business over the medium-term
Timeline of BBlunt Building scale in salon service business looks difficult (looking at Lakme salon & Kaya clinic examples)
1998: Adhuna Bhabani opens her
first salon in Mumbai
2001: Style all the leads from “Dil No. of salons 350+ 450+ 485+ 485+ 400 450+
Chahta Hai”
2005: Achieves the styling

milestone for 50+ major films
2008-09: Milestones achieved: Revenue (Rs.mn) 2,294 2,470 2,490 2,680 2,840 2,300 2,820 3,280
• 1mn Haircuts
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
• 17 Salons
Oct 2013: GCPL acquires ~30% • 3 Academies
stake in BBlunt
2014: Launched B-SYSTEM; India’s Revenue (Rs.mn) 1,977 2,048 2,108 2,147 2,129 1,296 1,498 1,822
Feb 2022:
• Honasa Consumer acquires first integrated hair care range for
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
GCPL’s 30% stake in BBlunt for Indian hair & weather – bringing
Rs. 84.5cr. consumers salon in a bottle
• Honasa also acquires Bblunt Hence, we estimate salon business wouldn’t add significantly to Honasa’s core TAM and can at best
salons & premium hair care, be used for improving visibility of Bblunt’s product business
hair colour & styling product
▪ As per DRHP, salon
range with an overall deal value
services business,
of Rs. 134cr Rs. bn
estimated at Rs. 640bn
in CY21, to be part of
560 - TAM for Honasa &
Bhabani Blunt Hairdressing Private Limited: Revenue (Rs.mn) 960 expect it to grow to Rs.
1.2-1.6tn by CY26
1,200
– ▪ In our opinion, salon
1,600 business would be
difficult to scale and
640
hence, we don’t expect
137 167 187 211 240 229 240 103 157 it to add significantly to
Honasa;s Core TAM
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: DRHP, MCA fillings, Annual Report, Avendus Spark Research Page 20
Avendus SPARK’s bottom-up aggregate of 59 BPC companies – D2C brands’ overall market share in the industry remained at mid-single digit as of FY22
Overall BPC Market Size

~1,288
(CY21) as per DRHP, Rs. bn
Avendus SPARK bottom-up

~887*
aggregate of 59
(602 – primary sales)
companies, Rs. Bn
D2C brands D2C brands

Listed players Unlisted players
(>Rs.1bn turnover) (<Rs.1bn turnover)
No. of companies: 10 No. of companies: 18 No. of companies: 10 No. of companies: 21

Market share: ~69% Market share: ~25% Market share: ~4% Market share: ~1%
3-yr CAGR: ~5% 3-yr CAGR: ~3% 3-yr CAGR: ~100% 3-yr CAGR: ~35%
Listed players – BPC Revenue^ (Rs mn)
456,858
415,915
Rs mn 380,081 373,895
360,048
FY19 FY20 FY21 FY22 FY23
*including GST and trade margins; încludes only BPC segment revenues of listed players; Source: DRHP, MCA fillings, Annual Report, Avendus Spark Research Page 21
Avendus SPARK’s bottom-up aggregate of 59 BPC companies – D2C brands growing exponentially albeit from a lower base
No. of Brands Brands Name Cumulative Revenue (Rs mn)
152,587
142,339
Unlisted BPC 137,696
companies^ 128,443
FY19 FY20 FY21 FY22
25,857
D2C with
12,836
turnover &
>Rs. 1bn 3,186
6,009
FY19 FY20 FY21 FY22
7,306
D2C with
4,403
turnover 2,992
3,685
<Rs. 1bn
FY19 FY20 FY21 FY22
încludes only BPC segment revenues; Source: DRHP, MCA fillings, Annual Report, Avendus Spark Research Page 22
What makes Honasa Consumer standout amongst the other digital-first BPC brands?
Early category pivot from Baby care to full-fledged BPC brand Right PRICING; maintaining stable high GM of ~70% despite
category pivot
71.2% 70.6%
70.0%
66.5%
64.7%
Baby care category Overall BPC segment

TAM: Rs. 0.15-0.2tn TAM: Rs. 1.3tn
1 6
FASTEST growing brand to reach Rs.10bn revenues Path to PROFITABILITY amidst the exponential growth journey
EBITDA margin, %
9,435
6.8%
3.2% 3.8%
2 5
4,600
-6.6%
1,098
-26.5%
3 4 FY19 FY20 FY21 FY22 1HFY23
FY20 FY21 FY22
HIGHEST saliency from offline channels among digital-first Relatively lower CAC (A&P) vs. other digital-first BPC brands
BPC brands
37% A&P spend, % of sales
51.6%
29% 41.8% 41.5%
38.7% 37.6%
19%
9%

Reasons for success – 1. Identifying the product gap, 2. Purpose-driven brand building from an early stage
1. Identifying the product gap – toxin free, natural ingredients & efficacy driven baby care products
Examples of consumers
Promoters’ (Varun Toxin-free embracing similar such brands
Alagh & Ghazal
Alagh) personal
quest for toxin-
free baby care Natural Ayurveda based food &
Ingredients personal care products
products for their
kid led to Hair Care Face & Body Beauty
identifying the gap Jessica Alba’s search
in the BPC market Home-based Similar value proposition extended to other BPC categories for toxin-free baby care
in India DIY process products for her kid
2. Purpose-driven brand building from an early stage
3Ps of the Brand: PRODUCT PROCESS PERSPECTIVE

▪ Purpose driven Brands
▪ ‘Goodness Inside’ ▪ Delivering on the promise of Quality ▪ Mamaearth - with every order placed on website,
WHY-based Brands
a tree is planted on behalf of the consumer
vs. ▪ Focus on PRODUCT being the core thing ▪ Asia’s first ‘MADE-SAFE’ certified
receiving geo-location & species of the plant
WHAT-based Brands products
▪ Toxin-free, Natural ingredients ▪ The Derma Co. - running scientists programme
▪ Every product is personally quality with government schools & linking orders to a
tested by promoters themselves person who gets free science education on every
▪ Extending the process playbook to other brands order placed
as well – The Derma Co, Aqualogica, Ayuga ▪ Aqualogica - giving access to free drinking water
for families in villages
Source: DRHP, New Articles, Interviews, Avendus Spark Research Page 24

Reasons for success – 3. Personal & strong marketing narrative , 4. Early expansion into Offline channel
3. Personal & Strong Marketing narrative
Marketing narrative Shilpa Shetty Kundra was an early investor,

through personal back in 2018 & first celebrity brand ambassador
experience when the brand was just selling its baby care
products and her first kid was 6-7 years old
Personally connected making her a perfect fit for the brand!
with 600+ moms in the
first 4 months, talking to
them about various
problems, their solutions Roping in celebrities
The Era of Why and where is the gap. eminent amongst the
Influencer Marketing:
Based Brands: millennials like Samantha
“Everything we innovate Collaborating with social media influencers
The Mamaearth and Sara Ali Khan to create
comes from our that tend to make the ad more engaging
Story ft. Ghazal a better connect
consumers. That’s why and genuine for the target audience – Gen Z
Alagh our products are ahead of Communications primarily
and millennials
the market” around efficacy
4. Early expansion into Offline channel from e-commerce
Offline contribution, % Offline Revenue (Rs.mn) ~80

37%
No. of EBOs
2,757 2,699
29%
35
19%
9%
Sep'22 Sep'23
857
As on Sep’22
FY20 FY21 FY22 1HFY23 99 Retail Outlets 1,12,000
Revenue No. of Distributors 449
1,098 4,600 9,435 7,227 FY20 FY21 FY22 1HFY23
(Rs.mn) MT Chains 30
Source: DRHP, New Articles, Interviews, Avendus Spark Research Page 25

Insights from our Consumer Survey (1/2) – Mamearth’s promise on product safety is the key reason for choice of the brand
GENDER AGE LOCATION
Consumer Survey
AVENDUS SPARK
18-34, South, 58% North, 10%

288 59%
Women,75%
respondents
Men, 25% 35-50, West, 30% East, 2%
50+, 8%
33%
When did you last buy from Mamaearth? What is the frequency of your purchase?
11%
Last Month 32% 11%

Within last 3 months
Within last 6 months Once a month Once in 3 Once in 6 Once a year

12% months months
One-off purchase
Never
11.4% 24.2% 22.4% 42.0%
34%
Which categories of Mamaearth have you bought recently? What is the reason for choosing Mamaearth’s products? Are the Mamaearth products true to their promise?
30% Others,
Pricing,
27% 10.05% To give it a try Yes 34%
11%
22%
Product
Performance, 15% Wanted to try given an No 9%
12% influencer was
9% promoting it
Better
product
range, Non-Toxic 57%
ingredients, 52% Suggested by peers
Can’t say
12%
Shampoo Hair Oil Baby Products Face Wash Beauty
Products
Source: Avendus Spark Research Page 26

Insight from Consumer Survey (2/2) – Consumers have discovered the brand via Influencers, word of mouth & Shopped largely from e-commerce platforms
How did you discover the Mamaearth brand? If not for Mamaearth, which other brands would you use/buy for similar categories?
Referral (Family/Friend) 30%

Others, 23% WOW Skin Science,
19%
Influencers (YouTube/Instagram) 29%
TV advertisements (Celebrity endorsements) 16%

Tresemme, 17%
Self-discovery 23%
L’oreal, 34%
Other (please specify) 3% Plum Goodness,
26%
Where do you shop your Mamaearth products from?
Other brands preferred by respondents
16% 27% 31%
MT - 15% GT - 12%

Reasons for success – 4. Spot consumer insights, ability to convert it to NPD and faster/agile innovation funnel
Strong R&D capability and process built within the organisation which keeps the innovation funnel active Timeline of launch of Onion-based hair care products
BRAND FACTORY In-house team including founders responsible for ideation, incubation & execution of new brands 2018-19 Onion-based hair oil
Tech Team Responsible for collecting consumer insights through digital listening Apr’21 Kesh King Ayurvedic Onion Oil
NPD Team Innovation team headed by Ms. Ghazal, converting consumer insight into NPD Jan’22 Parachute Advansed Hair Oil with Onion
Formulators (3rd
Involving formulators, 3rd party manufacturers and developing the product Feb’22 Coco Onion, non-sticky Coconut Hair Oil
party)
Mar’22 Vatika Onion Shampoo

Testing & Launch Rigorous quality testing of each innovation before launch
Identifying consumer insights early & converting it into products has been one of the key strengths of Honasa
Ingredient-based innovations through consumer insight Shampoo Face wash

Hair Oil
Onion Shampoo for Hair Fall Control Vitamin C Face Wash
Onion Ubtan Onion Hair Oil for Hair Regrowth
EARLIER Tea Tree Shampoo for Dandruff Free Hair Ubtan Face Wash with Turmeric
INNOVATIONS Products
in Jan’23 Tea Tree Hair oil for Dandruff free hair Onion Conditioner for Hair Fall Control
Tea Tree Tea Tree Facewash
Almond Hair Oil for Healthy Hair Growth Rosemary Anti-Hair Fall Shampoo with Methi Dana Multani Mitti Face Wash
Rosemary Rice Water Rice Water Shampoo For Damage Repair Rice Face Wash With Rice Water
INNOVATIONS Rosemary Essential Oil for Hair Growth
since Jan’23 New Curd Smoothening Shampoo CoCo Face Wash with Coffee
Multani Mitti innovations
Rosemary Hair Growth Oil & Methi Dana Lemon Anti-Dandruff Shampoo with Ginger Honey Malai Face Wash
Source: News Articles, Mamaearth website, Avendus Spark Research Page 28

Reasons for success – 5. Right positioning in the masstige price point & ability to maintain stable GM of ~70%
Gross margins remained stable amidst the exponential growth Stable gross margins vs. other digital-first BPC brands Stable GM despite adding multiple categories with BPC segment
10, 000
71.2% 70.0% 75. 0%
Gross Margin, % FY19 FY20 FY21 FY22

70.6%
9,0 00
66.5% 70. 0%
8,0 00
64.7% Honasa 64.7% 66.5% 71.2% 70.0%
65. 0%
7,0 00
Wow Skinsciences 36.3% 52.6% 63.3% 53.7%

Shampoo
6,0 00
60. 0%
Sugar 59.3% 61.3% 67.8% 70.1% Oils Face Care

5,0 00
Baby Conditioner Beauty

55. 0%
Serums Body Care

4,0 00
Masks
3,0 00
50. 0%
Plum 64.8% 64.7% 70.0% 63.8%
2,0 00
Stable GM despite adding multiple categories with BPC segment
45. 0% Mcaffeine 63.1% 65.2% 63.4% 61.8%
168 4,600 9,435 7,227
1,0 00
1,098
0 40. 0%
Myglamm 68.6% 68.4% 61.0% 55.0%

FY19 FY20 FY21 FY22 1HFY23 FY20 FY21 FY22 1HFY23
Be Minamalist 66.8% 81.0% 79.7% 74.0% GM, %
Revenue (Rs.mn) Gross Margin (%) 66.5% 71.2% 70.0% 70.6%
While masstige price point can expand Masstige price point of Mamaearth products across all categories within BPC
offline, it has limited premiumization
potential Baby Care Rs/100ml Hair Shampoo Rs/100ml Face Wash Rs/100ml Hair Oil Rs/100ml
Himalaya Baby Cream 75 Sunsilk Onion & Jojoba Oil 79 Everyuth Naturals Tulsi 100 Dabur Amla 47
Himalaya Neem 106
Parachute Baby Cream 88 Dabur Vatika Onion 109
Clean & Clear 130 Parachute 50
MASS PRESTIGE Chicco Baby Cream 100
TRESemme Botanique 116 Garnier Vitamin C 199 Bajaj Almond 74
Dove Baby Cream 100 Ponds Pure Detox 220
Kesh King Onion & Curry Leaves 125 Kesh King 116
Mamaearth Baby Cream 112 Cetaphil Cleanser 244
Mamaearth Onion Shampoo 140 Mamaearth Ubtan 250 DABUR Neelibhringa 21 199
Dabur Baby Cream 140
L'Oréal Professional 248 Mamaearth Vitamin C 259
MASSTIGE Jhonsons Baby Cream 175 Parachute Advansed Onion 200
Neutrogena Deep clean 245
Cetaphil Baby Cream 193 Schwarzkopf Professional Repair 400 Mamaearth Onion 240
Simple Kind To Skin 257
Sebamed Baby Cream 350 De Fabulous 540 Sebamed 403 Indulekha Oil 392
Source: MCA fillings, DRHP. Nykaa.com, Avendus Spark Research

Page 29
Success leading to lower CAC (lower A&P spends) for Honasa vs. other digital-first BPC brands; however, much higher than legacy incumbents
Honasa’s A&P spends are estimated to have fallen to ~35% in FY23P Honasa’s A&P spends lower relative to other digital-first BPC brands
vs. ~40% in FY22
Revenue (Rs.mn) A&P as % of sales
4,5 00 60. 0%
Company name FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22
51.6% 3,915
4,0 00
50. 0%
Honasa Consumer Ltd. 168 1,098 4,600 9,435 52% 42% 39% 41%
3,5 00
41.8% 41.5%
38.7% Body Cupid Pvt. Ltd. 18 65 998 3,404 - 39% 44% 55%
3,0 00 40. 0%
2,5 00
Vellvette Lifestyle Pvt. Ltd. 571 1,037 1,264 2,211 28% 27% 27% 44%
A&P (Rs.mn)
30. 0%
2,0 00 1,779
% of sales Pureplay Skin Sciences Pvt. Ltd. 219 523 906 1,845 - 40% 48% 52%
1,5 00 20. 0%
1,0 00
PEP Technologies Pvt. Ltd. 46 403 665 1,352 45% 46% 38% 54%
458 10. 0%
500
87 Uprising Science Pvt. Ltd. 18 63 216 1,082 - 83% 29% 31%

0 0.0 %
FY19 FY20 FY21 FY22 FSN E-commerce 11,114 17,675 24,409 37,739 13% 11% 7% 13%
Brainbees Solutions Pvt. Ltd. 5,078 8,142 16,029 24,013 17% 22% 10% 11%
▪ Honasa’s A&P spends at ~40% of sales is relatively better
compared to other D2C brands However, much higher compared to large legacy incumbents
▪ However, it is significantly higher compared to large legacy
49,070
companies in the industry 16.5%
11.5%
▪ With incremental expansion of distribution in offline and
increased brand equity, expect A&P spends to reduce 8.1% 8.6%
5.6% 6.3%
materially (as % of sales) over the medium-term 4.1% 4.1%
10,787 9,313 8,662
6,403 5,607 6,956
6,751 2,588
1.6%
BRIT DABUR HMN HUVR ITC MRCO NEST TCPL ZYWL
A&P spends in FY23 (Rs mn) % of sales
Source: DRHP, MCA/Company Filings, Avendus Spark Research Page 30
Revenue generated vs. Capital raised – Honasa scores better than other digital-first BPC brands
Honasa has raised a cumulative capital of Rs. 6.6bn* so far and generated ARR of ~Rs.15bn in FY23P... …and scores better than other digital-first BPC brands
Rs mn Cumulative capital raised Revenue FY22 (Rs mn) Ratio: Revenue Total capital
16,000 Company (FY22) / capital raised
Cumulative raised till date (Rs mn)
Revenue
14,500 Capital Raised
14,000
6,493 9,435 1.5 6,554
12,000
3,525 3,404 1.0 7,315

10,000 9,435
8,000 2,084 2,211 1.1 4,465

6,493 6,554*
6,000
4,600 1,088 1,845 1.7 3,722
4,000
2,245 1,352 0.6 2,258

2,000 1,629 1,629
2 53 168 1,098
0 968 1,082 1.1 968
FY17 FY18 FY19 FY20 FY21 FY22 FY23P
Ratio of revenue (FY22) by cumulative equity raised
1.5 1.0 1.1 1.7 0.6 1.1
Mamaearth Wow Skinsciences Sugar Plum Mcaffeine Be Minamalist
*Against the total capital raise of Rs. 6.6bn, Honasa Consumer has Rs. 4.4bn of cash & liquid investments in BS as of Sep’22; Source: DRHP, Filings, News Articles; Avendus Spark Research
Page 31
Comparing user traction and channel traffic of the brands under Honasa Consumer
Traffic details in respective brand website*
Total Visits in 90 days from Jun-Aug’23 (mn) 10.6 5.1 1.6 0.3 0.6 0.5
No. of visits: Jun’23 (mn) 3.4 2.1 0.6 0.2 0.1 0.2
No. of visits: Jul’23 (mn) 4.0 1.7 0.5 0.1 0.2 0.1
No. of visits: Aug’23 (mn) 3.1 1.3 0.5 0.1 0.2 0.1
Device Distribution: Desktop (%) 5% 5% 4% 3% 21% 11%
Device Distribution: Mobile Web (%) 95% 95% 96% 97% 79% 89%
Avg. monthly visits (mn) 3.5 1.7 0.5 0.1 0.2 0.2
Visit duration (min) 3.3 1.1 3.0 1.6 2.1 1.2
Pages per visit (x) 3.2 3.5 3.3 1.5 4.2 2.6
Bounce rate (%) 60% 52% 44% 77% 41% 51%
Traffic Channels (%)
Direct 19% 15% 17% 9% 18% 26%
Organic search 28% 16% 14% 6% 21% 15%
Social 19% 24% 20% 66% 23% 27%
Paid search 33% 43% 46% 19% 35% 31%
Email/Referrals/Display ads 1% 1% 2% 1% 3% 1%
*Above consumer traffic data pertains to Mamaearth website only; As with other D2C brands, expect material consumer traffic & sales to happen in its exclusive Mamaearth app; Source: Industry sources, Avendus Spark Research
Page 32
Comparing user traction and channel traffic of Mamaearth with other D2C players & BPC platforms
Traffic details in respective brand website*
Total Visits in 90 days from Jun-Aug’23

10.6 1.7 2.6 2.2 1.5 5.6 38.7 11.7
(mn)
No. of visits: Jun’23 (mn) 3.4 0.6 0.6 0.9 0.4 2.1 11.7 3.0
No. of visits: Jul’23 (mn) 4.0 0.7 1.4 0.7 0.5 1.6 14.0 4.4
No. of visits: Aug’23 (mn) 3.1 0.4 0.6 0.6 0.6 1.9 12.9 4.3
Device Distribution: Desktop (%) 5% 2% 9% 9% 16% 6% 10% 9%
Device Distribution: Mobile Web (%) 95% 98% 91% 91% 84% 94% 90% 91%
Avg. monthly visits (mn) 3.5 0.6 0.9 0.7 0.5 1.9 12.9 3.9
Visit duration (min) 3.3 3.3 3.5 2.3 3.2 3.4 2.5 4.5
Pages per visit (x) 3.2 6.0 5.6 4.3 3.0 4.1 5.1 4.5
Bounce rate (%) 60% 37% 59% 62% 62% 45% 56% 50%
Traffic Channels (%)
Direct 19% 33% 22% 22% 23% 15% 25% 16%
Organic search 28% 28% 33% 17% 38% 42% 45% 66%
Social 19% 12% 17% 16% 12% 18% 15% 16%
Paid search 33% 11% 26% 41% 27% 24% 14% 2%
Email/Referrals/Display ads 1% 16% 2% 4% 2% 1% 2% 1%
*Above consumer traffic data pertains to website only; We expect material consumer traffic & sales to happen in its their respective apps; Source: Industry sources, Avendus Spark Research Page 33
Mamaearth is amongst the Top 3 websites within BPC category in terms overall consumer visits
Top 5 websites of traffic share (consumer visits) within BPC category over 3 months (Jun-Aug’23) Top 5 websites of traffic share (consumer visits) within BPC category in Aug’23
Nykaa.com 12.8% Nykaa.com 12.9%
mamaearth.in 3.5% purplle.com 3.8%
purplle.com 3.3% mamaearth.in 3.1%
kindlife.in 2.8% myglamm.com 2.9%
myglamm.com 2.4% beminimalist.co 1.9%
Comparing number of App downloads of BPC brands in Google Playstore (‘000s downloads)
3,380 No. of cumulative downloads in the last 6 months (‘000s)

15,000
12,200
11,500
828
3,380
576 525 588
448 414 1,624
267
Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 6 months Nykaa Purplle firstcry Mamaearth Mcaffeine myGlamm
Source: Industry sources, Avendus Spark Research

Page 34
How does Mamaearth fit in our FMCG framework?
▪ While a few categories like Hair oil & Shampoos have little room further incremental penetration-led
Penetration of core categories
growth, other emerging categories like face creams, makeup, etc. have significant penetration potential
▪ With just a low single-digit market share across all sub-categories of BPC, Mamaearth has material
Market share opportunity opportunity-led market share-led growth on the back of its efficacy-driven products
Digital capabilities ▪ Strong digital capability making it the fastest growing digital-first BPC brand
▪ Within BPC, Mamaearth has material presence in categories like face care, makeup, etc. which are
Demographically favored categories
favored categories by Gen-Z & millennials
▪ Expect gross margins to be healthy & stable given the track of maintaining it at ~70% amidst the
Pricing power, margin stability
exponential revenue growth & foray into multiple sub-categories within BPC
Track record to get into adjacencies and ▪ Strong track record of emerging as a full-fledged BPC brand despite beginning the journey as a Baby care
create optionalities brand; Foray into salon business offers scope for optionality
Management depth ▪ Management team with strong pedigree in FMCG industry & minimum attrition so far
▪ Though challenged with numerous brands in the DTC space, Mamaearth has scaled up bigger than the
Risk of disruption competition; taking on the large incumbents in offline channels would be key monitorable
Can it still go wrong?
Valuation Attractiveness ▪ na

Attracting new consumers (users) and increasing wallet share & repeat orders (NPDs) are key growth drivers for Mamaearth
FMCG Growth
Drivers
Same Product More Product(s) Better Product(s) New Product(s)

to to to to
1 More Consumers
2 Same Consumers
3 Same Consumers
4 Same Consumers
(users) (usage) (premiumisation) (NPDs)
“In order to continue to increase the wallet share &

Significant growth opportunity to add users through Increasing the product usage per consumer Masstige price point of Mamaearth products has repeat orders from existing customers & attract
online and offline channels would be the most difficult to achieve limited scope for premiumisation new consumers in a cost-efficient manner, it is
important for us to maintain the quality,
- Colgate has been trying to make Indians trustworthiness, and authenticity of our brands &
products, continue to innovate, & develop new
brush twice per day to increase product usage
product categories.” - Mr. Varun Alagh
Honasa has significant potential to expand offline distribution at the current scale of business Mamaearths’ brand equity can Increasing wallet share & repeat orders from existing customers
attract more users to its DTC have been the key factors for Mamaearth’s success as they
Total outlet reach (in mn) 3.5-4.0 channel forayed into multiple sub-categories within the BPC segment
2.8
Increasing repeat orders: Consistent innovation funnel
1-1.2 backed by robust R&D team which has championed in
Cumulative unique transacting users converting consumer insights into NDP
~0.15 of ~8mn till data (since Apr’19)
FY23P FY14 FY20 FY20 Increasing wallet share: Foray into sub-categories within
Revenue BPC; Mamaearth is a late entrant into Makeup
14,500 18,208 17,668 17,112
(Rs.mn) categories and expect to gain incremental consumers &
FY20 FY21 FY22 FY23 market share in this category
5.3mn 5.6mn 8.0mn 10.0mn
Source: DRHP, Company fillings, Avendus Spark Research Page 36

House of Brands (1/2) – ‘The Derma Co.’ growth outpacing Mamaearth driven by science-backed products; on track to become profitable
BRAND INCEPTION • Launched in 2020
VALUE PROPOSITION • Science-backed products powered with active ingredients
• Offers a range of products that help resolve diverse concerns like active acne, acne marks,
pigmentation, dull skin, ageing, hair loss, dandruff, etc.
ABOUT THE BRAND
• The brand offers an AI enabled experience to consumers in the form of real-time skin assessment
analysis to help them detect skin conditions and identify specific products or regime for treatment.
The Derma Co. ARR outpacing Mamearth Seeking to replicate Mamaearth's successful strategy with other
emerging brands
300
Rs. 3.5bn+ ARR within 41 months of
launch, outpacing Mamaearth “Through the incubation and scale-up phase, we realized that we
have established repeatable playbooks that helped us reach
Monthly milestones faster than Mamaearth. The milestone achieved by
revenue (Rs mn)
90 90 The Derma Co has reinforced our belief in our playbooks and we
will continue to deploy our learnings across the portfolio brands of
Present in online as well as offline 25
Honasa Consumer.”
channels in select GT & MT outlets - Varun Alagh, Co-Founder Honasa Consumer Limited
Months
since launch 14 months 24 months 34 months 41 months
Widely used active ingredients in the market Pricing of The Derma Co. products vs. peers Science-backed BPC sub-category faced with heightened competition
Product Qty The Derma Co. Be Minamilist Plum
Vitamin C Glycolic Acid 5% Vitamin C Serum 30 ml 549 699 790
10% Niacinamide Serum 30ml 599 599 599
Niacinamide Hyaluronic Acid 2% Salicylic Acid Serum 30ml 499 549 na
8% Glycolic Acid Daily Face Cream 30g 499 350 345
1% Hyaluronic Acid Sunscreen Serum 30ml 499 599 599
Salicylic Acid Retinol
0.1% Retinol Serum 30ml 699 599 790
Source: DRHP, Brand website, News Articles, Avendus Spark Research Page 37
House of Brands (2/2) – Seeking to replicate Mamaearth's successful strategy with other emerging brands
Aqualogica Ayuga Dr. Sheth’s
BRAND BRAND BRAND

Launched in November 2021 Launched in December 2021 Acquired in April 2022
INCEPTION INCEPTION ACQUISITION
VALUE VALUE Ayurvedic beauty products in easy-to-use, VALUE Bio-actives based skincare developed by three
Hydrating skincare designed for Indian skin-types PROPOSITION modern formats for Indian millennials PROPOSITION generations of skin specialists
PROPOSITION
• Specialized skincare that leverages the science products span the face, body and hair care
combine potent active ingredients backed by
ABOUT THE of hydration to introduce products suited to ABOUT THE product categories, and include products such as ABOUT THE
science with the goodness of natural botanical
BRAND Indian skin types BRAND night gel, face serum, sunscreen, shampoo, BRAND
ingredients such as herbs, fruits, and leaves.
• Unique Water Lock Technology conditioner and hair serum.
Democratising Ayurveda
Dr. Sheth's is a luxury, vegan skincare brand formulated by three
Similar to how Vaseline, Nivea, and Boroplus Pricing of products sold under the Brand Ayuga generations of expertise in Indian skin research. The founders have
are brands that are generally associated with over six decades of expertise in Indian skin.
Product Qty Price (Rs.)
the winter season, Aqualogica can be with the
Bhringraj and Amla Oil 100ml 599
summer season as they are more water-based Revenue (Rs. Mn)
Kumkumadi Radiance Face Oil 15ml 899 65
& light in nature
Kumkumadi Night Cream 50g 799 46
Pure Rose Water 100ml 349 19 23
Aqualogica achieved Rs. 25mn in monthly revenue faster than 7 13
The Derma Co.

Pricing of the same products sold by others FY17 FY18 FY19 FY20 FY21 FY22
11 months Product Qty Kama Forest Essentials Scale-up in Dr. Sheth's monthly revenue post acquisition (acquired in Apr'22)
Bhringraj and Amla Oil 100ml 945 798
Sep'22
Kumkumadi Radiance Face Oil 15ml 3495 -
14 months Kumkumadi Night Cream 50g 3295 4041 3.6x
Apr'22
Pure Rose Water 100ml 990 900
Source: DRHP, MCA fillings, Brand websites, Avendus Spark Research Page 38
Path to High Profitability – Levers for margin expansion for Honasa from the current mid single-digit levels
Path to High Profitability
Gross margin, % Employee cost, % A&P spends, % Other opex, %

As % of sales
FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22
Honasa Consumer 64.7% 66.5% 71.2% 70.0% 12.4% 8.1% 6.0% 8.4% 51.6% 41.8% 38.7% 41.5% 27.2% 23.8% 20.5% 18.9%
Britannia Industries 40.6% 40.3% 41.9% 38.0% 4.0% 4.2% 4.0% 3.8% 4.5% 4.1% 3.4% 3.0% 16.4% 16.1% 15.4% 15.7%
Dabur India 49.5% 49.9% 49.9% 48.2% 11.0% 10.9% 10.8% 9.9% 7.1% 7.5% 8.2% 7.1% 11.0% 11.0% 10.0% 10.4%
Emami 65.7% 67.0% 67.7% 66.2% 10.4% 11.3% 10.7% 10.0% 17.4% 17.7% 15.9% 16.4% 10.9% 12.0% 10.4% 10.1%
Hindustan Unilever 53.0% 54.1% 52.9% 50.9% 4.8% 4.6% 5.0% 4.9% 11.7% 11.8% 10.1% 9.0% 13.9% 12.9% 13.1% 12.5%
ITC 64.0% 64.9% 59.1% 56.5% 5.6% 5.4% 5.7% 5.0% 5.0% 5.1% 5.4% 4.9% 15.3% 15.5% 13.5% 12.5%
Marico 45.2% 48.8% 46.9% 42.9% 6.4% 6.5% 7.1% 6.2% 9.0% 10.0% 8.6% 8.4% 11.8% 12.2% 11.5% 10.6%
Nestle India 57.8% 57.5% 56.9% 54.1% 10.2% 11.2% 10.4% 9.7% 6.3% 5.7% 5.2% 6.0% 17.4% 16.5% 17.3% 16.2%
Tata Consumer Products 44.7% 43.9% 40.5% 43.0% 11.1% 9.2% 8.4% 8.4% 7.6% 7.0% 6.3% 6.8% 15.2% 14.2% 12.6% 14.0%
Zydus Wellness 64.6% 55.9% 54.7% 51.2% 10.2% 8.8% 8.8% 8.1% 18.0% 12.7% 12.3% 11.7% 14.5% 16.2% 15.2% 14.2%

Honasa already enjoys high GM relative to

Employee cost at high single-digit at ▪ Led by increasing offline saliency, ▪ Led by operating leverage & cost
legacy incumbents; Current stable GM of current scale is already on a par with expect A&P spends (% of sales) for efficiencies, expect opex to trend
~70% is in line with BPC segment industry peers Mamaearth to decline going forward lower in line with large incumbents
▪ Spends on emerging brand also to be
rationalised as it gains scale
Source: DRHP, MCA fillings, Company fillings, Avendus Spark Research Page 39
Crystal gazing potential revenues, profitability & market value for Honasa over the medium-term
Value for Value for Other Overall Value for

Mamaearth Brand Emerging Brands Honasa Consumer
Other Emerging Brands Key Assumption:

Mamaearth Key Assumption:
1. Revenue to grow at a higher pace, of more than ~20% CAGR over medium-term
Key 1. Mamaearth contribution to be 75-77% in FY23P
2. From current double-digit EBITDA margin losses, all the emerging brands collectively
Assumptions 2. Revenue to grow at mid to high teen CAGR over medium-term
break-even over the medium-term
3. EBITDA margin to improve from low teen in FY23 to ~17% over medium-term
3. Valuing these brands at lower than the industry avg. sales multiple of ~4x
4. Valuing the brand at sector leader EBITDA multiple of ~30x
Mamaearth Other Emerging Brands Honasa Consumer

Rs mn
FY 23P FY 24P FY 25P FY 26P FY 27P CAGR FY 23P FY 24P FY 25P FY 26P FY 27P CAGR FY 23P FY 24P FY 25P FY 26P FY 27P CAGR
Contribution to overall
77% 23%
sales, %
Revenue 11,500 13,455 15,742 18,419 21,550 17% 3,400 4,420 5,746 7,470 9,711 30% 14,900 17,875 21,488 25,888 31,260 20%
EBITDA margin, % 12.0% 13.5% 15.0% 16.0% 17.0% -14.3% -11.3% -7.3% -4.3% -1.3% 6.0% 7.4% 9.0% 10.1% 11.3%
EBITDA 1,380 1,816 2,361 2,947 3,663 28% -486 -499 -419 -321 -126 na 894 1,317 1,942 2,626 3,538 41%
EBITDA/Sales multiple 30x 30x 4x 4x 45x/5x 42x/5x
Brand Value/EV 88,409 109,903 29,879 38,843 118,288 148,746
Source: Avendus Spark Research

Page 40
Valuation of peers in the industry
PE EV/EBITDA EV/Sales
Consensus Mkt. Cap. EV
CMP (Rs)
Estimates (Rs mn) (Rs mn)
FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
ZYWL 1,603 101,990 103,885 27 23 24 25 21 19 4 4 4
HMN 532 234,385 232,904 29 26 24 23 21 19 6 6 5
CLGT 1,611 438,142 429,601 38 35 30 25 23 21 8 7 7
MRCO 572 740,170 734,480 48 43 38 35 31 28 7 6 6
TATACONS 870 807,776 796,908 57 48 43 35 31 28 5 5 4
DABUR 558 988,707 994,502 50 43 38 40 34 31 8 7 6
NEST 22,524 2,171,672 2,164,176 73 63 56 48 42 37 11 10 9
GCPL 1,054 1,078,134 1,063,626 49 42 37 34 29 26 7 6 6
BRIT 4,529 1,090,784 1,102,022 51 44 39 36 31 28 6 6 5
ITC 446 5,566,714 5,352,479 26 24 21 19 17 16 7 7 6
HUVR 2,451 5,757,673 5,697,153 51 45 41 36 32 29 9 8 7
Sector Avg. 45 40 36 32 28 26 7 6 6
Source: Bloomberg, Avendus Spark Research

Page 41
Risks & Concerns
Scalability challenges in offline channel

▪ Mass distribution of business in offline channel would be a formidable task with its own challenges as against online business, particularly
when the company has to take on large legacy competitors in the market
Risks to path to high profitability
▪ Though the management has been calibrated in its House of Brands strategy particularly on acquisition of brands, management of multiple
emerging brands at the same time could be risky and can derail the envisioned path to profitability
Foray into new services business
▪ Foray into Salon business, though capital infusion is again calibrated into the segment, it is a new territory ventured by the company. Given
its relatively high capital-intensive nature, path to profitability could be a challenge over the medium-term
Risks of inorganic acquisitions
▪ In line with its House of Brands strategy, Honasa has made 2 acquisitions so far – Dr.Sheth’s, Bblunt & also acquired content platform
Momspresso; it could also venture into more inorganic expansion in the future. Integration & execution of multiple brands into the entity
could be a challenge
Page 42
1. Company Overview
3. Financial Analysis

PnL Statement – Reported EBITDA & PAT turned positive in FY22 & 1HFY23
Consolidated Annual Financial
as % of sales
Results
Rs.mn\Period FY20 FY21 FY22 1HFY23 FY20 FY21 FY22 1HFY23
Rs.mn\Period FY20 FY21 FY22 1HFY23
Net Revenues 1,098 4,600 9,435 7,227 100% 100% 100% 100%
Sale of products 1,098 4,600 9,319 6,848
Other Operating Income 0 0 0 0 0% 0% 0% 0%
Sale of services 0 0 116 379
Total Income from Operations 1,098 4,600 9,435 7,227 100% 100% 100% 100%
Content creation & influencer marketing 0 0 101 230
Raw material consumed 0 0 0 0 0% 0% 0% 0%
Hair care 0 0 15 147
Purchase of stock in trade 490 1,608 3,048 2,696 45% 35% 32% 37%
Other services 0 0 0 2
Increase/Decrease in Inventory -123 -281 -213 -569 -11% -6% -2% -8%
Total revenue 1,098 4,600 9,435 7,227
COGS 368 1,327 2,834 2,127 33% 29% 30% 29%
Gross Profit 730 3,273 6,600 5,100 67% 71% 70% 71%
Employee Remuneration 89 278 788 778 8% 6% 8% 11%
9% 19%
Advertisement Expense 458 1,779 3,915 2,720 42% 39% 41% 38% 29% 37%
Freight & forwarding charges 150 544 919 703 14% 12% 10% 10%
91% 81%
Other Expenses 720 2,723 5,697 4,183 66% 59% 60% 58% 71% 63%
EBITDA -78 272 115 139 -7% 6% 1% 2%
Other Income 44 121 209 93 4% 3% 2% 1% FY20 FY21 FY22 1HFY23
Depreciation 6 17 69 110 1% 0% 1% 2% Online (marketplace + DTC) Offline
Interest Expense 0 10 30 31 0% 0% 0% 0%
Extraordinary Income/(expense) -4239 -13612 0 0 -386% -296% 0% 0% Questions for the management
Profit Before Tax -4,280 -13,246 224 91 -390% -288% 2% 1%
1.Reason for higher tax rate of 36% & 60% in FY22 & 1HFY23 respectively? What
Taxation 0 76 80 55 0% 2% 1% 1% would be effective tax rate going forward?
2.Reason for higher income from Content creation and Hair care services in
Reported Profit after M.I. -4280 -13,322 157 77 -390% -290% 2% 1% 1HFY23?
Normalised Profit after M.I. -42 290 157 77 -4% 6% 2% 1%
Source: DRHP. Avendus Spark Research Page 44

Employee expenses – Impact of ESOP costs was ~200bps in FY22, leading to adj. EBITDA margin (ex-ESOP) of 3.2%
Breakup of Employee Expenses No. of Employees with Breakup: Strong team size of 136 members in Tech & Data
Functions 1HFY23
Rs.mn\Period FY20 FY21 FY22 1HFY23 2-yr CAGR
Management 19
Revenue 395
Salaries, Wages and Bonus 76 216 561 608 172%
Innovation 45
Contribution to provident fund 2 5 10 9 116% Brand Factory 19
Supply Chain & Operations 56
Gratuity expenses 2 6 14 13 149% Marketing 148
Technology & Data 136
Share based payment expenses 7 42 168 126 406% Strategy 13
Human Resources 25
Share based payment expenses 0 0 20 8 Finance 48
Legal & Regulatory 6
Staff welfare expenses 2 9 15 15 153% Administrative 62
Salon Stylists 78
Total 89 278 788 778 198%
Total 1,050
Remuneration of KMP in FY22

Rs.mn\Period FY20 FY21 FY22 1HFY23
KMP Designation FY22 (Rs. mn) FY22 % of PAT
Adj. EBITDA -72 314 302 272
Mr. Raman Preet Sohi Chief Financial Officer 22 15%
% margin -6.6% 6.8% 3.2% 3.8%
Mr. Zairus Master* Chief Business Officer 10 7%
ESOP costs 7 42 188 133
Ms. Anuja Mishra** Chief Marketing Officer 3 2% % of sales 0.6% 0.9% 2.0% 1.8%
Mr. Jayant Chauhan Chief Product and Technology Officer 21 15% Rep. EBITDA -78 272 115 139
% margin -7.1% 5.9% 1.2% 1.9%

Mr. Dhanraj Dagar Company Secretary - -
1.Given the 2% impact of ESOP cost in FY22, what would be
Total 56 39% Questions for the management
its impact on EBITDA margin in the near-term?
*joined in Aug’21, **joined in Mar’22; Source: DRHP, Avendus Spark Research

Page 45
Other Expenses – Average A&P cost was ~40-41% in the last 3 years, forming majority of the operational expenses
Rs.mn\Period % of sales
Other Expenses Break-up FY20 FY21 FY22 1HFY23 FY20 FY21 FY22 1HFY23
Advertisement expense 458 1,779 3,915 2,720 41.8% 38.7% 41.5% 37.6%
Freight & forwarding charges 150 544 919 703 13.7% 11.8% 9.7% 9.7%
Sales Commission 40 134 287 161 3.6% 2.9% 3.0% 2.2%
Software support expenses 13 48 128 110 1.2% 1.0% 1.4% 1.5%
Packaging materials & other consumables 15 84 138 106 1.4% 1.8% 1.5% 1.5%
Legal & professional charges 15 30 95 104 1.3% 0.7% 1.0% 1.4%
Influencer expense 0 0 26 55 0.0% 0.0% 0.3% 0.8%
Contract Labour charges 8 59 63 37 0.7% 1.3% 0.7% 0.5%
Miscellaneous Expenses 20 44 127 188 1.8% 1.0% 1.4% 2.6%
Total 720 2,723 5,697 4,183 66% 59% 60% 58%
4,5 00 43. 0% Questions for the management

4,0 00
41.5%
42. 0%
41.8% 1.Despite employing or engaging with thousands of influencers, reason for influencer expense being low
3,5 00
at less than 1% of sales?

41. 0%
3,0 00
40. 0%
2,5 00
2.What does get accounted as contract labour charges here? Reason for it being so low given the 100%
outsourced manufacturing?
39. 0%
2,0 00
38.7%
38. 0%
1,5 00
37.6% 3.What is the platform fees charged by B2C marketplaces like Amazon & Flipkart? Does Sales Commission
expenses relate entirely to those platform fess?
37. 0%
1,0 00
36. 0%
4.What expenses are included as part of Software support expenses? Does it increase linearly with
500
0 35. 0%
revenue?
A&P Expense as % of sales
Source: DRHP. Avendus Spark Research

Page 46
Depreciation & Interest – EBITDA margin of ~0.4% on pre-IndAS basis in FY22
90 90. 0% 1,0 00 20. 0%
80
81.2% 80. 0%
900
17.4% 18. 0%
Rs mn\Period FY20 FY21 FY22 1HFY23
70
84 70. 0%
800
13.3%
16. 0%
12.5% 865 EBITDA -78 272 115 139

Depreciation
700 14. 0%
60 60. 0%
600 12. 0%
50 50. 0%
53 500
597 10. 0%
% margin -7.15% 5.92% 1.21% 1.92%

32.3%
40 40. 0%
400 8.0 %
30
22.4% 26.5% 30. 0%
300 6.0 %
Interest on lease liabilities 0 8 26 25

9
20 20. 0%
8
200 4.0 %
4 3 3 214 51 63
10
14
10. 0%
100
2 0 14 2.0 %
Depreciation on ROU asset 3 14 51 63

0 0.0 % 0
0.0% 0.0 %
FY20 FY21 FY22 1HFY23 FY20 FY21 FY22 1HFY23 EBITDA pre IndAS -82 250 38 50
Gross Block PPE (Rs.mn) Depreciation (Rs.mn) Gross Block RoU (Rs.mn) Depreciation (Rs.mn) % margin -7.47% 5.43% 0.40% 0.70%
Depreciation % Depreciation %
80 35% 900 14. 0%
73 781 272
70 32% 30%
800
11.5% 12. 0%
250
700
60
560
25% 10. 0%
Finance Cost
600
50
7.8% 139
17%
20% 8.0 %
36 6.7% 115
500
40
400
15% 6.0 %
30
11% 38 50
9% 10%
300
203 3.8% 4.0 %
20
200
4 5 5%
8 26 25
2.0 %
0 0 0 4 0
10
100
2
0 0% 0 0.0 %
FY20 FY21 FY22 1HFY23 FY20 FY21 FY22 1HFY23 -78 -82
Borrowings (Rs.mn) Finance Cost (Rs.mn) Lease Liabilities (Rs.mn) Finance Cost (Rs.mn)
Interest % Interest % EBITDA (Rs.mn) EBITDA pre IndAS (Rs.mn)
Source: DRHP. Avendus Spark Research

Page 47
Balance Sheet – Favourable WC cycle and improving return ratios

Consolidated Annual Financial Results
Rs. mn\Period FY20 FY21 FY22 1HFY23 Favourable WC cycle in line with incumbent FMCG players driven by D2C channel
Equity Share capital 0 0 0 1,363
Reserves & Surplus -4,372 -17,652 7,056 5,918 Net WC 6 8 -4 -12 9
Networth -4,372 -17,651 7,056 7,281 Days
Loan Funds 5,931 19,743 596 853
30
Other Long-term Liability 3 24 720 571 45 31
33 25
1,563 2,116 8,372 8,811 Debtor Days 57
Total Liabilities 35 27 28 36
Inventory Days
-73 -64 -66 -57
4 14 53 84 Creditor Days -82
Gross Block
Acc. Depreciation 0 3 10 19
Capital WIP 0 0 0 10 FY19 FY20 FY21 FY22 1HFY23
Net Block 4 11 44 76
RoU Assets 6 200 532 736
Intangible Assets 0 0 2,859 3,145
Investments 1,247 1,706 4,280 3,415
Current Assets 552 1,109 2,635 4,187 With improvement in margins, return ratios turned positive over the last 2 years
Inventories 137 413 659 1,221
20. 0%
17.8%
Sundry Debtors 106 338 728 1,419 2.3 0
15. 0%
Cash & Bank Balances 263 208 877 964

10. 0%
2.17 1.64 1.8 0
Other Current Assets 46 150 372 583

2.2% 3.0% 2.8%
2.1%
5.0 %
Short term Loans & Advances 0 0 0 0 na* na*

1.3 0
0.0 %
Current Liabilities 1.13 0.8 0
219 803 1,704 2,276

-5.0%
-2.6%
Current Liabilities / Trade payables 0.56 0.70 0.3 0
26 98 250 440
-10.0%
Other Current Liabilities

3 9 24 31
-15.0%
-11.8% -11.6% -0.20
Provisions
Net Current Assets 305 198 658 1,440
1,563 2,116 8,372 8,811 ROE (%) ROCE (%), pre-tax Total Asset Turnover
Total Assets
Source: DRHP, MCA fillings, Avendus Spark Research

Page 48
Cash Flow Statement – Healthy cash flow conversion & cash position
Rs.mn\Period FY20 FY21 FY22 1HFY23 2-yr CAGR

Healthy positive cash flow conversion in FY21/22; however, turned negative in 1HFY23
446 432
Operating Profit before Working Capital Changes -71 324 327 318 -
297 287
Total Working Capital Changes -33 37 213 -946 -
Net Cash Generated from Operating Activities -104 297 446 -656 - -7 -11
-104 -108
Net cash from investing activities -1,169 -206 -4,998 454 107%
FREE CASH FLOW -108 287 432 -699 - -656

-699
Net cash used in financing activities 1,287 -13 4,808 -50 93%
OCF (Rs. mn) FCF (Rs. mn)
Cash and cash equivalents at the end of year 19 98 304 23 298%
Nil external debt and healthy cash on books add comfort
5,157
4,379
1,914
1,510
853
596
289 203
0 4
Total Debt (incl. Lease Liabilities) (Rs.mn) Cash (incl. investments) (Rs.mn)
Page 49
1. Company Overview

Founders of Honasa Consumer Ltd.
Mr. Varun Alagh Ms. Gazhal Alagh
Regional Brand Manager

Innovations (South Asia) Corporate Trainer
2007-2012 2008-2010
Senior Brand Manager Founder

2012-2013 dietexpert.in
2012-2013
Senior Brand Manager Artist

2013-2016 2012-2016
Co-founder, CEO Co-founder, Chief

Nov’16 - Present Innovation Officer
Aug’16 - Present
Attributes & how he build the company Leveraging the complementary skill sets
Deep knowledge of the FMCG industry Identifying product gap
Strong process orientation Converting consumer insights into NPD

Ability to leverage technology/data Quality obsession
Purposeful brand building since the early stage Marketing face of the company & personal
consumer connect
Taking the offline route quite early
Brand Factory team
House of brands strategy
Source: Company Website, Linkedin, Avendus Spark Research Page 51

Key Management Personnel

Recent Past
Apr-20 2018 – 2020 2011 – 2018 2011 – 2016 2007 – 2011 2005 – 2007
Raman Preet Sohi
Chief Financial Officer
Chief Financial Officer Chief Financial Officer Chief Financial Officer Investment Professional Manager, M&A Equity Analyst
Aug-21 2013 – 2021 2011 – 2013 2007 – 2011 1997 – 2007

Zairus Master
Chief Business Officer
Chief Business Officer Chief Executive Officer Senior Vice President Category Head Brand Manager
Mar-22 2019 – 2022 2009 – 2019 2008 – 2009 2005 – 2007

Anuja Mishra
Chief Marketing Officer
Chief Marketing Officer VP & Head of Marketing Associate Marketing Director Consultant National Account Manager
Nov-20 2018 – 2020 2018 2017 – 2018 2013 – 2017 2011 – 2013 2004 – 2011
Jayant Chauhan
Chief Product and
Technology Officer Chief Product and Chief Product Officer VP, Product VP, Product VP, Product GM, Devices Assistant Manager
Technology Officer
May-22 2018 – 2022 2015 – 2018 2014 – 2015 2013 – 2014

Dhanraj Dagar
Company Secretary
Company Secretary & Compliance
Company Secretary Company Secretary Manager Legal & Secretarial Company Secretary
Officer
Source: DRHP; Company Website, Linkedin, Avendus Spark Research Page 52

Leadership Team
Recent Past
Abhishek Raj Pandey Dec-19 2017 – 2019 2016 – 2017 2011 – 2016 2009 – 2011
SVP, Commerical
(Sourcing, Procurement
& Manufacturing) SVP, Commerical (Sourcing, Head, Supply Chain & Logistics Manager, Production Planning
COO, Private Brands Head Supply Chian, Private Labels
Procurement & Manufacturing) & Supply Chain
Apr-21 2015 – 2021 2013 – 2014

Karanveer Bajwa
VP, Human Resources
VP, Human Resources Head, HR Assistant Manager
Apr-21 2011 – 2021 2009 – 2010 2006 – 2008

Avinash Dhagat
VP, Supply Chain
VP, Supply Chain Head of Supply Chain Assistant Operations Manager Deputy Manager, Marketing Field Services
Dec-21 2020 – 2021 2018 – 2020 2017 – 2018

Shivang Jain
Chief of Staff
Chief of Staff Senior Associate Associate IB Analyst
Jan-19 2017 – 2018 2015 – 2017 2014 – 2015

Abhishek Gupta
SVP, Online Revenue
Associate Consultant, Data Analytics & Pricing
SVP, Growth Head of Performance Marketing & Growth Head of Marketing

Leadership Team
Recent Past
Apr-22 2017 – 2022 2014 – 2017

Ankur Chaudhary
VP, Retail
VP, Retail Head, Retail Operations, Max Fashions Group Manager, Sales & Operations (Forever 21)
Apr-20 2014 – 2020 2011 – 2014 2007 – 2010

Ashish Mishra
SVP, Offline Mediacom MTD
Head, Institutional & International Business
SVP, Offline Development Business Head, India & SEA Head, Operations & Service Delivery
Aug-19 2017 – 2019 2014 – 2017 2012 – 2014

Ashutosh Mamgain
VP, New Product
Development
VP, New Product Development Deputy General Manager Group Product Manager Product Manager
Apr-21 2013 – 2017 2013 2011 – 2013

Mohit Shankar Srivastava
SVP, Corporate
Development
Product manager
VP, Corporate Development Senior Manager Area Sales & Customer Manager
Oct-21 2017 – 2021 2014 – 2017

Nidhi Mehta
VP, Marketing
General Manager, Leading Strategic Initiatives Associate
Chief of Staff

Leadership Team
Recent Past
Aug-22 2018 – 2022 2017 – 2018

Ojaswa Sharma
VP, Product
VP, Product Associate Director, Product Management Product Manager
Jul-22 2014 – 2022

Snigdha Anand
VP, Marketing
VP, Marketing Senior Brand Manager
Aug-22 2021 – 2022 2014 – 2021

Sugam Agarwal
VP, Engineering
VP, Engineering Engineering manager Deputy General Manager, Engineer
Aug-20 2015 – 2020

Vipul Maheshwari
SVP, Analytics
Senior Manager, Analytics
SVP, Analytics
May-22 2020 – 2022 2011 – 2020 2009 – 2011

Tarun Aggarwal
VP, International Sales
VP, International Sales Head of Sales, Middle-east National Key Account Manager (MT) Area Sales Manager

Leadership Team
Recent Past
Sept-19 2018 – 2019 2014 – 2018

Vidushi Goyal
VP, Marketing
VP, Marketing Lead – Brand & Communication Senior Brand Manager
Jun-22 2014 – 2022

Suchi Garg
VP, Sales Strategy
VP, Sales Strategy National Manager - Ecommerce
Aug-20 2018 – 2019 2014 – 2018 2013 – 2014

Tripti Pandey
AVP, Corporate
Communications
VP, International Sales Head of Sales, Middle-east National Key Account Manager (MT) Area Sales Manager
Source: Company Website, Linkedin, Avendus Spark Research

Page 56
Key Management changes
Key Management changes over the last three years
Name Date of change Reason for change in board
Mr. Varun Alagh 26-Jul-22 Appointed as CEO under Section 203 of Companies Act (in addition to Whole-time Director) Exits in Key Management Positions in recent past
Ms. Ghazal Alagh 26-Jul-22 Appointment as Chief Innovation Officer (in addition to Whole-time Director) Name Designation Period
Mr. Dhanraj Dagar 11-May-22 Appointed as Company Secretary Mr. Ashish Mishra SVP, Offline Apr'20 - Sept'23
VP, Brand Factory

Ms. Anuja Mishra 10-Mar-22 Appointed as Chief Marketing Officer Mr. Pratik Mukherjee Jun'22 - Jul'23
(New Business & Brands)
Mr. Zairus Master 16-Aug-21 Appointed as Chief Business Officer Mr. Kunwarjeet Singh Grover SVP, Ecommerce Jan'19 - Apr'23
Mr. Jayant Chauhan 2-Nov-20 Appointed as Chief Product and Technology Officer
Mr. Raman Preet

27-Apr-20 Appointed as Chief Financial officer
Sohi
Roles moved on to
No. of options
Designation Names No. of options granted Name Designation DOJ
outstanding
Clensta International
Key Management Personnel Mr. Ashish Mishra Sept'23
Co-founder, Chief Business Officer
Chief Financial Officer Mr. Raman Preet Sohi 438,600 490,200 House of Masaba
Mr. Pratik Mukherjee Jul'23
Head of Business – Beauty
Chief Product and Technology Officer Mr. Jayant Chauhan 606,300 645,000
Pluckk
Mr. Kunwarjeet Singh Grover May'23
Chief Business Officer Mr. Zairus Master 735,300 735,300 Head of Growth
Chief Marketing Officer Ms. Anuja Mishra 232,200 232,200
Company Secretary Mr. Dhanraj Dagar 4,955 4,955
Source: DRHP; Avendus Spark Research

Page 57
Committees & BOD Remuneration
The Board consists of three independent directors and one non-executive director
Subramaniam
BOD member Vivek Gambhir Ishaan Mittal Namita Gupta Ghazal Alagh Varun Alagh
Somasundaram
Audit Committee Chairman Member Member
Nomination and Remuneration Committee Chairman Member Member
Corporate Social Responsibility Committee Member Chairman Member
Stakeholders Relationship Committee Member Chairman Member
Risk Management Committee Chairman Member Member
IPO Committee Member Member Chairman
Source: DRHP, Avendus Spark Research
Remuneration of select BOD member in FY22

BOD Designation FY22 (Rs. mn) FY22 % of PAT
Varun Alagh Chairman, Whole-time Director and Chief Executive Officer 11 8%
Ghazal Alagh Whole-time Director and Chief Innovation Officer 7 5%
Ishaan Mittal Non-Executive Director - -
Vivek Gambhir Independent Director - -
Subramaniam Somasundaram Independent Director - -
Namita Gupta Independent Director - -
Total - 18 13%
Source: DRHP, Avendus Spark Research
Page 58
Glossary
Opex Operating Expenses B2B Business to Business
P&L Profit & Loss B2C Business to Consumer
P/E Price to Earnings D2C Direct to Consumer
PAT Profit After Tax DTC Direct to Consumer
PBT Profit Before Tax FMCG Fast Moving Consumer Goods
Govt. Government CAC Cost of Acquiring Customer
CMP Current Market Price OFS Offer for Sale
CAGR Compound Annual Growth Rate EBO Exclusive Brand Outlet
FY Financial Year WC Working Capital
YoY Year on Year ROE Return on Equity
MoM Month on Month ROCE Return on Capital Employed
Capex Capital Expenditure OCF Operating Cash Flow
RM Raw Material FCF Free Cash Flow
HC Home Care GT General Trade
BPC Beauty & Personal Care MT Modern Trade
HUVR Hindustan Unilever TAM Total Addressable Market
EPS Earnings Per Share NPD New Product Development
WiMi Winning in Many Indias ARR Annual Run Rate
A&P Advertising & Promotion BOD Board of Directors
GM Gross Margin
COGS Cost of Goods Sold
DRHP Draft Red Herring Prospectus
Page 59
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ADD Stock expected to provide positive returns of >5% – <15% over a 1-year horizon SELL Stock expected to fall >10% over a 1-year horizon
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SPARK INSTITUTIONAL EQUITIES PRIVATE LIMITED

Key Highlights of the note

Analysis from Avendus SPARK’s bottom-up

Key takeaways from Avendus SPARK Consumer survey

Analysis of Honasa Consumer vs. Other

Path to High Profitability, Crystal Gazing –

3. Financial (forensic) Analysis

4. Management & Corporate Governance

Auditors S.R. Batliboi & Associates LLP

Operational Timeline of Honasa Consumer

Source: DRHP, Company website, News articles, Avendus Spark Research

September, 2022 Allotment to Shilpa Shetty Kundra 60 10 81,653

Preference Capital Raised

July, 2021 656 Class E NCCCPS to Sofina 1,472 10 54,123

Total Capital Raised 6,554

Issue price/ transfer

May-22 Bonus issue in the ratio of 1:12,899 10,164,412 na na na

Sep-22 Transfer to Sunita Sahni* 100,000 na Gift na

Total secondary sale by promoters 1,124

*part of promoter family; Source: DRHP, Avendus Spark Research Page 9

Launch: 2016 Launch : 2020 Launch : 2021 Launch : 2021

Standalone Operations Ayurvedic beauty products

PT Honasa Consumer Honasa Consumer General

engaged in the business of engaged in the business of

Shareholding & Dilution: ~15% of current shareholding is on offer through OFS

Total 136,336,336 100 13,213 311,177,793* 100 46,819,635 15 85

70.6% -7.9% 0.5%

64.7% 66. 0% 100

1 -134.9% -45 -42

-73 -64 -66 -57 1.13 0.8 0

Creditor Days -82 -5.0%

FY19 FY20 FY21 FY22 1HFY23 -15.0%

FY19 FY20 FY21 FY22 1HFY23

Operational Metrics (1/2)

12% 14% 13% 13%

Questions for the management

Source: DRHP, Avendus Spark Research Page 15

Operational Metrics (2/2)

Pan India distribution of volumes across channels Total

EBO’s & SALON

3. Financial (forensic) Analysis

4. Management & Corporate Governance

905 1,282 1,103 1,289 2,400

Offline Market Online Market

Unorganised (GT) Organised (MT)

Source: DRHP, Avendus Spark Research Page 18

Presence of Honasa across all segment of BPC market

Source: DRHP, Avendus Spark Research Page 19

2005: Achieves the styling

Overall BPC Market Size

Avendus SPARK bottom-up

D2C brands D2C brands

No. of companies: 10 No. of companies: 18 No. of companies: 10 No. of companies: 21

Listed players – BPC Revenue^ (Rs mn)

FY19 FY20 FY21 FY22 FY23

No. of Brands Brands Name Cumulative Revenue (Rs mn)

FY19 FY20 FY21 FY22

FY19 FY20 FY21 FY22