Honasa Consumer Limited — Important, 21-11-2024: Updates

Honasa Consumer Limited has issued a clarification addressing misinformation propagated by the All India Consumer Products Distributors Federation (AICPDF) regarding the company's distributor practices and its ongoing distribution transition under Project Neev. The company highlights that its actual inventory with active distributors amounts to INR 40.69 Cr, refuting claims of ~INR 300 Cr of near-expiry inventory.

Honasa is progressing towards a single-layered distribution structure, with 70% implementation in top cities, during which total returns have amounted to INR 63.52 Cr. The company has already received INR 41.21 Cr of inventory returns, with the remaining INR 21.32 Cr pending pickup. Further, outstanding claims from channel partners are only INR 4.73 Cr, significantly lower than the AICPDF's estimate of ~INR 50 Cr.

Accounts receivable have improved, decreasing from INR 46 Cr to INR 25 Cr over recent months, indicating a healthy collection rate of 94% of sales. Additionally, inventory turnover has shown improvement, contradicting any suggestions of excessive stock at retail. The company reaffirms its commitment to corporate governance and transparency, emphasizing its proactive approach in managing the transition with its distributor network.