One Hundred and Twenty-Two Launches: How a Growth Plan Became a Focus Problem

The Activity Trap: When 122 Launches Dilute Margin

Growth plans often reward activity. A new product feels like progress, a new market feels like ambition, and a new campaign feels like momentum. Then costs, complexity and confusion catch up. Honasa Consumer, the company behind Mamaearth, offers a recent, public example.

Inc42 reported in August 2025 that Honasa launched 122 products in 2023 alone, which the article said diluted focus. In FY25, revenue rose 8% to Rs 2,066.9 crore, but profit fell 32% to Rs 72.6 crore. The first half of FY25 saw revenue fall 7%, cash flow turned negative, Q2 FY25 recorded a net loss of Rs 18.6 crore and the share price dropped about 40%. Two senior executives left. Co-founder Varun Alagh called the year "a year of learnings, focussed execution and necessary corrections."

The Anatomy of a Corporate Reset

The company concentrated on six owned brands (Mamaearth, The Derma Co., BBLUNT, Staze, Aqualogica and Dr. Sheth's), which together make up over 80% of revenue. Three categories, serums, face cleansers and sunscreen, each passed Rs 100 crore in annual run-rate sales.

It moved about half its inventory to a direct distribution model, expanded its reach to about 2.4 lakh FMCG outlets by June 2025, and put more weight on quick commerce. In the first quarter of FY26, net profit rose 2.4% to Rs 41.3 crore on operating revenue of Rs 595.3 crore. For Q3 FY26, revenue from operations was Rs 602 crore, up 16.2%, with profit after tax of Rs 50 crore, up 93%. [Sources: Inc42, 21 Aug 2025; Entrackr, 12 Feb 2026.]

“A year of learnings, focussed execution and necessary corrections.”

Why Pruning Is Culturally Difficult for Founders

Each new product has someone who believes in it. Sales teams want something new to pitch, marketing wants a story, and founders enjoy launching. Stopping a product feels like admitting a mistake.

Yet every active product uses working capital, shelf space, management attention and customer-service time.

A Practical Five-Step Portfolio Focus Audit

1. List every product or service and its monthly gross profit. If you have more than 30 items, group them. 2. Find the top 20%. In many businesses a fifth of products generate most of the profit. Check whether that is true for you. 3. Find the tail. Products that sell rarely and need special stock are the first to examine. 4. Count the hidden costs. Setup time, minimum order quantities, packaging variants and returns add up. 5. Decide on three actions: stop, simplify, or invest. Do not leave items in a fourth bucket of "wait and see." 6. Tell the sales team why. People accept cuts when they understand the logic.

Lessons for MSME Manufacturers: The 400-Part Bottleneck

A small engineering firm that makes 400 part numbers for 60 customers faces the same issue. Changeovers eat machine hours, inventory ties up cash, and quality problems multiply. Our Productivity guide covers how counting stoppage reasons shows where the time goes. Cutting the tail often frees capacity faster than a new machine.

A worked example (illustrative, not a real company): Imagine a 40-person firm that makes 400 part numbers for 60 customers. The owner lists each part's monthly gross profit and finds that 70 parts bring in about four-fifths of the margin, while 200 parts sell only a few times a year. Each of those slow items needs its own tooling, its own bin and its own inspection plan. The owner decides to quote the slow parts at a higher price, ask customers to order them in larger batches, and stop making the ten least profitable ones. Nothing is lost except complexity. The numbers here are invented to show the method; run your own.

Preserving Portfolio Discipline Beyond the Turnaround

A caution: Focus is not the same as shrinking. Honasa did not stop launching; it directed launches at categories with proven demand. The point is to let evidence, not enthusiasm, decide which launches get funded.

The one-sentence lesson: A company is defined as much by what it declines to do as by what it launches.

How to keep the discipline once the reset is done: Set a rule that every new product must replace something or pass a stated sales test within six months. Review the portfolio every quarter, not once a year. And give the person who proposes a launch a share in the result, so the idea is argued on numbers.

Analysis built from public reports. We have not interviewed Honasa's management.