India’s startups haven’t had the best time at the stock markets, but the latest startup to go public appears to have hit the ground running.
Mamaearth’s shares hit the 20% upper circuit a day after the company reported a 94% rise in its quarterly profit. The company’s shares rose steadily after opening, and hit the maximum possible 20% gain in a single day at around 10:30 am, and maintained that level for the rest of the day. Yesterday, Mamaearth had reported a strong set of numbers in which its profit had nearly doubled over the same quarter the previous year.
This quarter, Mamaearth’s revenue from operations rose 21% to Rs. 496 crore. Its profit grew to Rs. 30 crore, double from the last period last year. “Honasa (Mamaearth’s parent company) has been able to deliver market-beating growth and constantly improve the profitability portfolio of the company,” Honsala CEO Varun Alagh said. “Our business has grown by 33 percent Y-o-Y in H1FY24 which is 3.8 times the median growth of FMCG companies in India,” he added.
“Our profits grew much faster than our revenues, with H1 profit after tax growing by 1,377% to Rs 54 crore. Dr Sheths has become the 4th brand from Honasa portfolio to enter the Rs 150 crore Club after Aqualogica and Derma Co. We will continue to deliver on our commitments to our business, consumers, and investors,” he added.
Mamaearth had listed on the stock markets earlier this month after an aborted attempt last year. At that point, it had been reportedly seeking a valuation of $3 billion, but after noticing investor sentiment, had withdrawn from its IPO. It had finally gone public this year at a valuation of $1.25 billion.
Mamaearth’s shares had been priced at Rs. 324 crore in its IPO. They had opened flat, and had even fallen a few days after listing, touching a low of Rs. 256. They had since recovered, and had been trading at around Rs. 350 per share. After the release of its latest quarterly numbers, they’ve shot up 20% in a single day, and now trade at Rs. 423 a share.
Other listed startups too have seen an improvement in their fortunes over the last few months. Last year, most of these shares had been hammered, and had lost anywhere between 50% and 75% of their value. But some shares like Zomato have rebounded smartly, and are trading at nearly 3x their all-time lows, while others like Policybazaar, Paytm and Nykaa have also recovered some of their losses. Amidst all this, Mamaearth too appears to have gotten off to a strong start, and this strength in startup shares should augur well for the entire sector as a whole.