Key Points
- Honasa denies AICPDF’s inventory overhang claims, reporting a ₹40.69 crore distributor inventory.
- The company is transitioning to a single-layer distribution model in top-50 cities, with 70% already completed.
- Inventory returns totaled ₹63.52 crore, with ₹41.21 crore already received in warehouses.
- Accounts receivables from general trade distributors reduced from ₹46 crore to ₹25 crore.
- Stock turnover ratio improved from 35 days to 27 days, better than the category’s average.
- Honasa emphasizes transparency, audited by a Big 4 firm with strong internal audit processes.
Looma News
Honasa Consumer Limited has rejected accusations made by the All India Consumer Products Distributors Federation (AICPDF) about its distribution practices. The company released a detailed clarification in response, disputing the federation’s claims about inventory levels and financial issues.
As of October 31, 2024, Honasa reported a total distributor inventory of ₹40.69 crore, significantly lower than AICPDF’s claim of ₹300 crore. The company is in the process of transitioning to a single-layer distribution model under its “Project Neev” initiative, focusing on top-50 cities. Currently, 70% of these markets have already adopted this model.
Honasa also highlighted that it has managed the transition effectively, with total inventory returns reaching ₹63.52 crore. Of this amount, ₹41.21 crore has been received at warehouses, while the remaining ₹21.32 crore is still in transit.
In addition to inventory management, Honasa reported improvements in its financials. Accounts receivables from general trade distributors dropped from ₹46 crore in March 2024 to ₹25 crore in September 2024. The company’s stock turnover ratio improved from 35 days to 27 days, surpassing the category’s average of 35 days.
The company underscored its commitment to corporate governance and transparency. Honasa is audited by a Big 4 firm and maintains a strong internal audit process, reinforcing its commitment to ethical business practices.
