FirstCry Shares See Significant Drop
Brainbees Solutions Ltd, the parent company behind popular baby products retailer FirstCry, experienced a sharp decline in its share price on Wednesday, May 27, 2026. The stock plunged 6.83 percent in early trade, hitting a low of Rs 221.05.
Despite this downturn, brokerage firm JM Financial maintained its 'ADD' rating on FirstCry shares. The firm also reiterated its target price of Rs 265, suggesting potential upside for investors.
Q4 FY26 Performance Highlights
JM Financial noted that Brainbees Solutions delivered an operating performance that was broadly in line with expectations during the March 2026 quarter (Q4 FY26), albeit with some segmental variances.
The India multi-channel (IMC) gross merchandise value (GMV) saw an 11.8 percent year-on-year (YoY) increase. However, this growth was reportedly impacted by intense competitive pressure within the diapering category, which accounts for approximately 15 percent of the company's total GMV.
The adjusted EBITDA margin for the IMC business declined by approximately 200 basis points (bps) YoY, settling at 7.3 percent for the quarter.
International Business and GlobalBees Performance
- International Business: GMV growth in the international segment remained muted at 1.8 percent YoY. This was primarily attributed to heightened promotional activities from other horizontal players in the market. Despite the slow growth, the international business managed to meaningfully narrow its EBITDA losses during the quarter.
- GlobalBees: In contrast, GlobalBees, another segment of Brainbees Solutions, reported a strong margin performance. It delivered a margin of 5.8 percent, marking a significant increase of 510 bps YoY. This improvement was largely supported by its core categories as the rationalization of non-core brands neared completion.
Margin Pressures and Offsetting Factors
The consolidated gross margin remained under pressure due to several factors, including elevated discounting in the diaper category, depreciation of the rupee, and higher raw material costs linked to crude oil prices. However, the company managed to partially offset these impacts through operating leverage and improved marketing efficiencies. These efforts led to a 30 bps YoY expansion in the adjusted consolidated EBITDA margin, bringing it to 5.5 percent.
Strategic Initiatives Show Promise
JM Financial also highlighted positive traction in Brainbees Solutions' strategic initiatives, which include RocketBees, FirstCry Qwik, and the realignment of its offline assortment. The brokerage firm stated that these initiatives are already contributing to an enhanced customer experience, improved delivery metrics, and increased footfalls in offline stores.
Looking ahead, JM Financial expressed expectations for a meaningful pick-up in IMC GMV growth in the fiscal year 2027, underpinning their continued 'ADD' rating on the stock.