Monday, February 3, 2025

Honasa refutes inventory overhang claims, clarifies distribution transition

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Honasa Consumer Limited has strongly denied allegations by the All India Consumer Products Distributors Federation (AICPDF) regarding its distribution practices, releasing a detailed clarification today.

The shares of Honasa Consumer Limited were trading at ₹258.30 down by ₹5.80 or 2.20 per cent on the NSE today at 11 am.

The company categorically challenged AICPDF’s claims about inventory and financial matters. As of October 31, 2024, Honasa reported a total distributor inventory of ₹40.69 crore, significantly lower than the AICPDF’s claimed figure of approximately ₹300 crore.

Under its “Project Neev,” Honasa is transitioning to a single-layered distribution model in top-50 cities, having already implemented this structure in 70% of these markets. The company has proactively managed the transition, with total inventory returns amounting to ₹63.52 crore. Of this, ₹41.21 crore has already been received in warehouses, with the remaining ₹21.32 crore in process.

The company also highlighted improvements in its financial metrics, noting that accounts receivables from general trade distributors reduced from ₹46 crore in March 2024 to ₹25 crore in September 2024. Furthermore, Nielsen RMS data showed the company’s stock turnover ratio improved from 35 to 27 days, compared to the category’s 35-day average.

Honasa emphasized its commitment to corporate governance and transparency, being audited by a Big 4 firm with robust internal audit processes.







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