Shares of BrainBees Solutions, the parent of FirstCry, came under heavy selling pressure on Wednesday, May 27, after the company’s March quarter (Q4FY26) performance reflected a mixed operating performance.
While
FirstCry’s Q4FY26 results showed steady growth in its India business, they also underscored continued pressure on margins amid rising competition and input costs.
Besides, though the company delivered double-digit revenue growth and improved profitability at the consolidated level, analysts at JM Financial Institutional Securities remain cautious on near-term margin trends as competitive intensity in key categories remains elevated.
The brokerage maintained an ‘Add’ rating with a March 2027 target price of ₹265.
Brainbees Solutions' India business
Brainbees Solutions’ India multi-channel (IMC) business reported gross merchandise value (GMV) growth of 11.8 per cent year-on-year (Y-o-Y) in Q4FY26, supported by a 9 per cent rise in transacting users and a 10 per cent increase in order volumes. GMV was lower by 13.6 per cent sequentially.
Revenue from the segment grew 11.4 per cent Y-o-Y to roughly ₹1,490 crore.
Analysts at JM Financial, however, noted that despite a better show compared to previous quarters, growth remains below the company’s historical “steady-state” trajectory of high-teen expansion.
They linked the moderation to higher competition in the diapering category, which contributes around 15 per cent to IMC GMV -- as quick commerce platforms and large horizontal ecommerce players intensified customer acquisition efforts.
“Though offline growth has improved sequentially, but headwinds in online have left the near-term clouded,” JM Financial said.
Margin pressure disappoints
FirstCry’s India multi-channel gross margin declined 280 basis points (bps) Y-o-Y due to increased discounting in diapers and elevated cost of goods sold (COGS), driven by rupee depreciation and higher crude-linked input costs.
As a result, adjusted Ebitda margin for the segment declined 210bps Y-o-Y to 7.3 per cent.
JM Financial analysts, however, noted that the margin hit, due to higher COGS, is “transitionary” in nature which may recover by Q2FY27 through pass-through to customers.
At the consolidated level, gross margin fell 210bps Y-o-Y to 35.4 per cent.
International business remains challenging
Brainbees’ international segment, meanwhile, faced a difficult demand environment where GMV growth came in at just 1.8 per cent Y-o-Y, while revenue rose 9.5 per cent Y-o-Y to ₹230 crore.
The company attributed the slowdown to continued promotional intensity by large ecommerce platforms, softer consumer sentiment, and import-related disruptions linked to geopolitical developments.
Management said its focus remains on improving topline quality rather than chasing volume. The company also continues to prioritise “optimising topline mix to yield superior GMV-revenue conversion and margin improvement.”
“Our existing moats, including brand strength, customer trust, and network effects, will sustain our long-term positioning,” the management said.
For now, the segment is loss-making, with adjusted Ebitda margin at negative 9.2 per cent.
Gren shoots emerge in GlobalBees biz
GlobalBees, BrainBees’ brand aggregator business, delivered revenue growth of 15 per cent Y-o-Y to ₹460 crore in the March 2026 quarter.
The management said growth has been affected by deliberate rationalisation of non-core brands and changes in Flipkart’s settlement model.
While adjusted Ebitda margin stood at 5.8 per cent during the quarter, core categories grew 28 per cent during FY26.
Going ahead, the management expects rationalisation of non-core brands to conclude by Q1FY27, after which both growth and margins are expected to normalise.
Logistics and quick delivery become strategic levers
Lastly, JM Financial sees new initiatives as a bright spot for Brainbees.
The company’s in-house logistics platform, RocketBees, for instance, expanded from 22 cities in Q3FY26 to 62 cities in Q4, and handles more than 40 per cent of online shipment volumes.
Separately, FirstCry Qwik -- its sub-three-hour delivery service -- is gaining traction and currently operates across select pin codes in five cities.
Management indicated that nearly 20 per cent of online orders in active Qwik zones are already fulfilled through the platform and expects the service to account for over 10 per cent of total online shipments during FY27.
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