Financial Performance Summary

Q2 FY2027 Performance Highlights:

  • Net sales growth of 36% YoY - highest growth quarter since IPO (12 quarters)
  • EBITDA margin of 12.7%, representing doubling of EBITDA
  • Gross margin maintained at 70% despite crude cost pressures
  • Volume growth (UVG) of 31.3%
  • Strong cash generation accompanying growth

EBITDA Improvement Drivers:

  • 250-270 basis points improvement from A&P and mix efficiencies (favorable channel mix toward offline and QC)
  • 110-140 basis points from operating leverage

Strategic Business Updates

Focus Category Strategy:

  • Focus categories now contribute 80%+ of revenue (increased from 70%)
  • Focus categories grew over 40% YoY
  • Total focus categories market size: ₹50,000 crores
  • Company's current share within focus categories: ~5%

Channel Performance:

  • E-commerce growth: 20%+
  • General trade growth: 40%
  • Modern trade growth: 40%
  • Same store growth: 30%+

Brand Performance:

Mamaearth:

  • High teens growth trajectory in Q2
  • Market share gains: 140 bps in face wash, 50 bps in shampoo (Nielsen measured)
  • Available at 3.2 lakh outlets
  • 26% YoY growth in numeric distribution
  • 40%+ YoY offtake growth in modern trade

Younger Brands:

  • Overall younger brands growth: 45%+ YoY
  • Excluding The Derma Co.: 40%+ YoY growth
  • Brand positioning:
  • Aqualogica: Focused on Gen Z with sunscreen, moisturizers, mist
  • Dr. Sheth's: Focused on evolved active consumers
  • BBlunt: Hair color and styling
  • Staze: Color cosmetics for Gen Z
  • Reginald Men: Men's grooming

The Derma Co.:

  • Second ₹1,000+ crores brand
  • Strong profitable growth trajectory
  • Consumer love index searches at highest ever
  • Nielsen measured market share: 1.2% in face washes
  • Outlet reach: 65,000 (Mamaearth reference: 300,000)
  • Strong traction in offline with 4 quarters of focus

Innovation and Product Development

Recent Innovations:

  • Mamaearth collaboration with Chaayos on tinted lip balm
  • The Derma Co. entry into body washes category
  • Aqualogica launched tinted sun serums and new mist
  • BBlunt focusing on curl care category
  • Rice Moisturizer from Mamaearth showing strong performance versus competition in blind testing
  • Strong clinicals on products in The Derma Co. and Aqualogica

Product Renovation:

  • Worked on moisturizers before winter season
  • Product superiority strengthening through clinical testing

Corporate Social Responsibility

Community Initiatives:

  • Mamaearth: Tree planting
  • The Derma Co.: Science education for kids
  • BBlunt: Teaching women hairstyling and skills
  • Dr. Sheth's: Health checks
  • Recently opened schools for preschoolers focusing on better nutrition and health

Management Commentary and Outlook

Growth Confidence Drivers:

  • Consumer love and franchise strengthening
  • High-teen growth across both online and offline channels
  • Healthy consumer measures (SPONT, TOM, brand affinity, brand power)
  • SAH (Sales per Average Handler) increased more than market share
  • Nielsen measured inventory turns improved
  • 80% of growth delta from current distribution universe

Market Outlook:

  • India's per capita beauty spend among lowest in Asian population (lower than Bangladesh)
  • Structural tailwinds: Women joining workforce, men's awareness increasing
  • Indonesia has 4x per capita BPC consumption compared to India
  • Category expected to grow strongly for next decade

Margin Guidance:

  • Medium-term target: 15% EBITDA margin
  • Year-wise goals may vary (exceptional years vs. growth investment years)
  • Current trajectory: Around 12.5% margin range

Category Deep Dive: Hair Color

Market Dynamics:

  • Category transitioning from dye format to crème format (longer-lasting, less damaging)
  • India penetration: 5%+ (low compared to global)
  • Growth driven by non-black colors and styling colors
  • Opportunity for safer toxin-free colors

Company Participation:

  • Currently through BBlunt Hair Color (performing well)
  • Considering entry from another brand (to be communicated)

Q&A Session Highlights

Younger Brands Growth: Confirmed 40%+ growth even excluding The Derma Co.

BBlunt Performance:

  • Hair color portfolio growing at 100%+ YoY post relaunch
  • Styling category growing well, especially on quick commerce
  • Care category (shampoo/conditioners) performing okay, planned relaunch

Margin Drivers: Part of A&P improvement from channel mix change showing in other expenses improvement

Volume vs Value Growth: Divergence due to MRP increases (crude impact) and channel/brand mix

Innovation Strategy: Understanding Gen Z needs and innovating accordingly while renovating current products