The Honasa Illusion, Flipkart Eyes Food Delivery, and USV Pharma’s Acquisition

Honasa’s Q3 FY26 numbers look like a comeback. Revenue up, profit nearly doubled, margins expanding - the headline reads like a D2C redemption arc. But before celebrating, a harder question looms: is this momentum, or merely math?

Revenue grew 16% YoY to ₹601 crore. Net profit rose from ₹26 crore to ₹50 crore. EBITDA improved, with margins nearing 11% - solid for a D2C-origin brand. But this feels less like breakout growth and more like engineered stabilisation.

The rebound is flattered by what we call the “low-base illusion.” FY25 absorbed Project Neev’s distributor reset, ₹63.5 crore in sales returns, and inventory clean-up that depressed revenue and margins. When you purge the system in one year, the next automatically looks healthier. The 93% PAT jump reflects easier comparisons as much as stronger demand.

Look at the P&L. Revenue rose 16%, but procurement costs grew nearly 20%. That divergence matters. Honasa historically operated at ~70% gross margins, but rising input costs, higher trade terms, and deeper offline expansion are exerting pressure. If gross margins soften while EBITDA expands, that signals cost discipline - not structural pricing power.

Much of the margin recovery comes from lower marketing intensity and the absence of exceptional charges. Marketing spend grew just 8.5% against 16% revenue growth. That could reflect efficiency - or under-investment.

Mamaearth has returned to double-digit growth but is maturing in Tier-1 markets. Digital-first brands eventually hit S-curve ceilings. Incremental growth must now come from offline expansion, premium adjacencies, or portfolio depth. The Derma Co, Aqualogica, Dr. Sheth’s, and BBlunt are growing 30%+, but their smaller base cannot fully offset structural deceleration at the flagship.

This is where the “House of Brands” thesis faces scrutiny. Active-ingredient brands offer higher ASPs and contribution margins, but depend heavily on high-CAC digital channels and trend cycles. Without defensible formulation IP or clinical differentiation, skincare risks becoming label arbitrage rather than durable moat.

The offline pivot adds complexity. Moving from super-stockists to direct distribution improves visibility but shifts working capital burden onto Honasa. Channel friction, including complaints around unsold inventory, signals execution risk. Direct distribution often extends receivable cycles and increases DSO exposure. One clean-up cycle does not ensure the last.

Competition sharpens the contrast. Against Nykaa’s ecosystem, Honasa wins on gross margin but lacks platform leverage. Against HUL, ITC, and Emami - where 23%+ EBITDA is standard - 11% remains mid-tier. It is no longer a hyper-growth tech story, yet not a high-margin FMCG compounder either.

That creates a valuation dilemma. If growth stabilises at 15–18%, markets will benchmark it to FMCG peers with deeper distribution and stronger procurement power. Honasa risks valuation no-man’s land: FMCG growth without FMCG margins.

The real question is strategic. Will management reinvest margin recovery into R&D, backward integration, and first-party data - or continue polishing quarterly optics? Reinvestment may compress margins by 100–150 bps, but without it, the house of brands risks becoming a house of mirrors.

Engineered stability is progress. Durable growth is still unproven.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Kuch Bada Karne Ki Ichha”: BRND.ME Eyes ₹1,700 Cr Revenue In FY26 Amid Global Expansion

BRND.ME is charting a steadier course in FY26, projecting 15-22% YoY growth to ₹1,600-₹1,700 Cr as it leans into global expansion and sharper operational discipline.

After a 5.8% dip in FY25 revenue to $168 Mn from $178.6 Mn, the company now expects to break even at the adjusted EBITDA level this year, signaling a pivot from rapid roll-ups to calibrated consolidation.

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“Kuch Naya Ho Jaye”: Flipkart Mulls Entry In Food Delivery Segment

Flipkart is quietly cooking up a food delivery foray, with plans to pilot the service in Bengaluru around May-June before eyeing a wider rollout by late 2026 or early next year.

The Walmart-owned giant is reportedly working on a differentiated play in a market long dominated by entrenched rivals, signaling it does not intend to enter as just another aggregator.

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“Waqt Rehte Qalti Maarne Ka”: SaaS Unicorn Icertis Mulls Sale At $5 Bn Valuation

Icertis is reportedly exploring a sale at a $5 Bn valuation, with multiple buyout firms said to have shown early interest in the AI-driven contract management platform.

The development comes just weeks after the passing of cofounder Sameer Bodas, marking a moment of transition for the 2009-born SaaS unicorn.

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“Hum Saath Saath Hai”: USV Pharma Acquires 79% Stake In Wellbeing Nutrition For ₹1,583 Cr

USV Pharma is making a decisive pivot into preventive health, signing an all-cash deal to acquire a 79% stake in Wellbeing Nutrition for ₹1,583 Cr.

The transaction includes roughly 35% from founder Avnish Chhabria and about 44% from existing investors, consolidating control in one swift move.

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“Achha Toh Hum Chalte Hai”: State-Backed NIIF Exits Ather With ₹521 Cr Stake Sale

National Investment and Infrastructure Fund has exited Ather Energy with a ₹521 Cr block deal, selling 73.3 Lakh shares at ₹710 each.

The stake was snapped up by large institutional investors, coming just months after Tiger Global Management’s full exit, signifying continued churn among early backers.

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“Paayega Jo Lakshya Hai Tera”: Dhruva, Astrome & Azista To Build Indigenous Small Satellite Bus Platforms

IN-SPACe has selected Dhruva Space, Astrome and Azista BST Aerospace from 15 applicants to build indigenous small satellite bus platforms under its SBaaS initiative.

Each startup will receive a ₹5 Cr grant to develop modular, scalable systems capable of supporting multiple hosted payloads. The broader aim is clear: create a cost-effective, export-ready satellite backbone that strengthens India’s private space ambitions.

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1. DUSQ has raised ₹24 Cr in a seed round led by Fireside Ventures, as it gears up to enter the US market with its sleep regulation tech. Originally launched as InnerGize in 2023, the startup now offers stick-on wearables delivering vagus nerve stimulation.

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2. Elixiir Foods has raised $9 Mn in a round led by 3one4 Capital with participation from Incubate Fund Asia to launch its gourmet food and grocery delivery platform. Targeting the “affordable premium” segment, the startup plans to roll out healthy ready-to-eat offerings.

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3. Indigrid Technology has raised ₹40 Cr in a Series A round led by Valour Capital to expand manufacturing capacity and strengthen R&D. The capital will also support working capital and selective integration across its automotive and consumer appliances segments.

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4. W Health Ventures has marked the first close of its second fund at ₹550 Cr, aiming to back eight to ten early-stage healthtech startups with cheque sizes ranging between ₹30 Cr and ₹50 Cr. Founded by Sunil Wadhwani, the fund will double down on longevity and preventive care.

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5. UKHI has raised ₹10.5 Cr in a seed round led by Venture Catalysts, aiming to replace 24 lakh kg of single-use plastic with its biopolymer solutions. The funds will scale production of EcoGran, deepen its formulation IP and expand partnerships across the packaging value chain.

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6. UrbanWipe has secured ₹2 Cr on Shark Tank India Season 5, with backing from Aman Gupta and Anupam Mittal. The non-toxic cleaning brand plans to channel the funds into faster product innovation and expanded manufacturing capacity.

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7. Digitory has raised $500,000 in pre-Series A funding from angel investor Tejas Paresh Lodaya to scale market reach and strengthen operational support for clients. The bootstrapped startup already powers over 1.8 million diners, serving leading chains such as Toit - Bengaluru and Biergarten - Bengaluru among others.

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