What's In Store For Honasa Consumer In FY25? | NDTV Profit
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00:00 We're taking stock of Onasa. Well the earnings have come in and it's turning out to be a very very steady quarter. In fact a
00:07 healthy revenue top line growth. And we're looking at your EBITDA gains as against an EBITDA loss with margins coming in
00:14 around 7 percent. And also the bottom line turning back in the black. Of course to talk to us about the quarter we are in
00:21 conversation with Ramanpreet Soni the chief financial officer of Onasa Consumer. Ramanpreet good morning. Thank you so much for
00:27 joining in. Well it's certainly turned out to be a strong quarter for you all. Your assessment on how things could pan out for
00:35 FY 25 going in. You're starting the year on a positive note. What's what what are we looking forward to.
00:41 Hi. Good morning. Thank you for having me. Yeah of course. You know we've delivered almost a 30 percent year on year growth
00:52 for a full year number. You know and our volume growths have been pretty healthy. I mean you know almost 40 percent for the
00:58 year. You know we've actually continued a fairly good momentum through the year. You know we had Mama Earth and I am the
01:05 brand scaling and hitting new milestones during the year. For example the second brand hit a 500 crore annual run rate
01:13 during the year. Other brands Dr. Shade and Ecologica hit milestones earlier in the year of 180 and 50 crore in annual run
01:21 rate. So we you know as we look ahead we continue to build and focus on building the work continue the momentum into next
01:29 year. We are looking at a 20 percent plus kind of value growth and volume growth coming in a little higher than that. You know
01:37 we will you know we continue to focus on gaining market shares across our core categories in my work. We will continue to
01:44 further scale our younger brands into newer categories and continue to scale and hit new milestones for our younger brands.
01:51 You know and really leverage the playbooks that we've been able to establish across e-commerce platforms across our own
01:59 D2C platform and also further deepen our distribution across offline. You know we are currently present in 200000 retail
02:08 touchpoints. We expect to you know further improve our direct distribution reach on the offline side and further get into
02:16 newer territories and deepen our distribution from that perspective. And hence all of that should help us sort of sustain the
02:24 growth momentum and enable a 20 percent plus kind of value top line growth for us in the coming year.
02:32 Ramanpreet this DermaCo has reached fairly significant in terms of contribution to your top line into F525. What sort of
02:43 contribution are you expecting from DermaCo and also believe you're going to be expanding into offline channels. Is that going to
02:49 come at a cost and what sort of cost are you working with.
02:52 Yes. So you know what we've done is that we like I said for you know offline is a three year old channel for us. We sort of
03:01 started scaling into offline through Mammoth and you know currently we are fairly well penetrated across the offline channel
03:10 be it the general trade outlets where we are in about 200000 retail touchpoints in modern trade. We hold pretty decent
03:17 shares in our categories across key modern trade accounts like Wallmart Reliance and DMart. And we are obviously further
03:27 deepening our partnerships with our key accounts. You know we're also very very well penetrated in chemist chains as well. And
03:35 you know in fact hold leading shares across core categories in some of these chains. So you know for DermaCo clearly it will
03:42 ride on our offline distribution that we've been able to establish through Mammoth now. In fact DermaCo last year we don't want
03:52 the focus on offline wasn't there much. We were in fact scaling the brand on the online side. So most of the milestone that
03:58 we've been able to hit is driven by our online presence and our online sort of strengths across platforms. Now as we enter this
04:07 year our focus is to also take DermaCo into select the modern trade account into select offline GT accounts. And hopefully
04:16 you know we should be able to scale that brand and ensure that whatever the consumer wants to shop us that brand is present
04:22 given that proposition of active ingredients is now a fairly large proposition across the consumer segments. And hence you
04:30 know we should be from a cost perspective like you asked. It's not incremental cost given that we've already set up that
04:36 distribution through Mammoth. It's about you know now of course through deeper partnerships with our key channel partners
04:44 we should be able to present that brand to our consumers in the existing distribution set up. Right. Ramanpreet my next
04:50 question is your ad spends going forward. One with respect to revenues. Where is that trajectory growing. And secondly you
04:58 know there are some concerns around certain violations that have come about from what we understand is that advertising
05:04 violations have led to a certain cases in terms of. Are you making any provisions towards these cases. And is there a
05:14 likelihood that this could actually impact margins in any way going forward.
05:17 No. So I think let me sort of address it in two parts. I think your first question was around ad spends going into next
05:25 year. So like we've sort of demonstrated this year and in previous years we are clearly unlocking margins and ad spend
05:34 or NPS we call it is our biggest leverage driver. You know we're targeting about 150 bips in expansion on our operating
05:43 margin side next year and about two third of it should come from optimizing our spend. And we've really seen as brands
05:51 scale you know are we able to optimize as a percentage of sales on the side. And clearly of course not reducing the
05:58 absolute spends but because the brand scaling fast we're able to optimize the spend as a percentage of sales. So I think
06:04 that trajectory is you know we've demonstrated that is good in the right direction and we are hopeful of delivering that as
06:11 we get into next year. I think your second point is I think there's one of the ASCII reports wherein I think you know
06:22 they've talked about us one of the violators. I think just to clarify there is you know we are probably the highest
06:30 you know users of influencers when it comes to digital marketing and almost 95 percent of those violations have been
06:41 reported in the by ASCII has been towards the influencers. And you know typically it's not on the it's not really on the
06:49 companies actually on the it's about the influencers. In fact some lot of influencers forget to tag the sponsored tag
06:58 when they sort of you know talk about the brand. And I think that's where there's been a little bit you know we're
07:04 working very closely with ASCII and ensuring that some of these things are taken care of. And in fact all of this has no
07:10 impact on our financials. It's just it's just a process that we have to implement and focus on. And we are very sort of
07:17 constructively working with ASCII and ensuring that you know all of this is taken care of as we get into next year.
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