FirstCry parent's losses fall 47% to Rs 63 crore in Q2FY25, revenue rises to Rs 1,905 crore

Brainbees Solutions, the parent company of FirstCry, has significantly reduced its losses in the July-September 2024 quarter (Q2FY25).

The Pune-based retailer of mother and baby care products reported a net loss of Rs 62.85 crore, a 47% improvement compared to Rs 119.4 crore in the same period last year.

This marks an improvement from the Rs 75.68 crore loss reported in the prior quarter, ending June 2024.

The company achieved a 26.4% year-on-year (YoY) increase in operating revenue, reaching Rs 1,904.91 crore, up from Rs 1,506.88 crore in Q2FY24. Quarter-on-quarter (QoQ), the revenue rose by 15% from Rs 1,652.07 crore.

This robust growth was mirrored in its gross merchandise value (GMV), which surged by 21% YoY to Rs 2,528.6 crore.

Profitable gains in India and abroad

Domestically, FirstCry’s multi-channel business reported a 19% YoY revenue growth, supported by a 38% YoY rise in adjusted EBITDA (earnings before interest, tax, depreciation, and amortization).

Internationally, the business delivered a 25% YoY revenue increase, with EBITDA margins improving by 390 basis points. FirstCry’s international operations boast an average order value nearly four times higher than its domestic business.

Supam Maheshwari, co-founder and CEO, emphasized the company’s focus on achieving profitability. “We aim to grow both the topline and bottomline by optimizing spending and improving contribution margins after marketing,” Maheshwari said during an analyst call.

GlobalBees, a subsidiary managing multiple brands, demonstrated robust performance with a 55% YoY revenue increase. CFO Gautam Sharma attributed part of this growth to advanced seasonal sales.

The company projects a compound annual growth rate (CAGR) of over 13% in this segment.

Setbacks and recoveries

Despite strong financial performance, Brainbees faced challenges, including a GST investigation at its Pune headquarters. The probe, spanning November 6–10, uncovered discrepancies in GST returns between FY19 and FY23.

The company paid a Rs 1.74 crore fine related to these findings. Additionally, questions arose regarding GST on expenses linked to its initial public offering (IPO).

FirstCry also dealt with operational disruptions from external events, including warehouse fires in West Bengal and Maharashtra earlier this year.

Flooding in Dubai and Sharjah in April 2024 caused temporary setbacks to its international operations. The company assured investors that insurance claims covering these losses are being processed.

Strategic investments and expansion

Funds from FirstCry’s IPO, which debuted at a 40% premium in August, are being used for expansion.

The company plans to establish modern stores under its BabyHug brand, bolster warehousing, and increase investments in GlobalBees and international ventures. 

As of September 2024, Rs 84.8 crore of the Rs 169 crore allocated for GlobalBees investments had been utilized.

The company’s in-house brands, including Babyoye and Cute Walk, continue to cater to its growing customer base of 9.9 million annual transacting consumers. It offers 1.8 million stock-keeping units from over 7,900 brands across platforms.