Are Honasa Consumer Ltd latest results good or bad?

Honasa Consumer Ltd's latest financial results for the quarter ended December 2025 reflect a significant operational turnaround. The company reported net sales of ₹601.54 crores, marking a sequential growth of 11.80% compared to the previous quarter, and a year-on-year increase of 16.24%. This quarter represents the highest revenue in the company's history, indicating a robust demand for its digital-first brand portfolio. In terms of profitability, the net profit reached ₹50.20 crores, which is a 27.96% increase from the prior quarter and an impressive 92.93% growth year-on-year. The operating margin also saw a notable improvement, reaching 10.89%, the highest recorded by the company, showcasing effective cost management and operational efficiency. The company operates with a completely debt-free balance sheet, which provides it with significant financial flexibility. However, the valuation multiples remain elevated, suggesting that the market has high expectations for future growth. The recent performance has led to an adjustment in its evaluation, reflecting the company's recovery from previous profitability challenges. Despite these positive trends, there are concerns regarding working capital efficiency, as indicated by a decline in the debtors turnover ratio, which may suggest potential collection challenges. Additionally, the company has experienced mixed signals from institutional investors, with foreign institutional holdings decreasing while domestic institutional participation has increased. Overall, Honasa Consumer Ltd's latest results indicate a strong recovery and operational improvement, but the sustainability of this growth and the associated valuation levels will be critical to monitor in the coming quarters.