Brainbees Solutions Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

FirstCry delivered a resilient Q1 FY26 despite significant macro and operational headwinds, including a consumer slowdown, logistics disruptions, and geopolitical tensions. The quarter was marked by a milestone shift to positive consolidated Free Cash Flow and continued structural improvement in gross margins. While India Multi-channel growth moderated to 8%, management expressed strong confidence in a recovery, citing early teen growth in July and the expansion of last-mile delivery experiments.

Highlights

  • Consolidated Revenue grew 13% YoY to ₹1,862.6 crores (INR 18,626 million)

  • Adjusted EBITDA margin expanded 50 bps YoY to 5.0% from 4.5% in Q1 FY25

  • Company achieved positive Free Cash Flow at a consolidated level for the first time

  • India Multi-channel gross margins expanded by 120 bps YoY to 37.8%

  • Globalbees reported 31% YoY revenue growth, with core categories growing at 40%+

  • International business (Middle East) reduced absolute burn by 30% YoY

  • Annual Unique Transacting Customers (AUTC) reached 10.8 million, up 14% YoY

  • Management reported a recovery in July with India Multi-channel revenue growth in 'early teens'

Concerns

  • Last-mile delivery ecosystem challenges

Key financials

  1. Revenue ₹1,862.6 Cr +13%YoY
  2. Adjusted EBITDA Margin 5%
  3. Cash Profit After Tax Growth 197% +197%YoY
  4. Annual Unique Transacting Customers 10.8 Mn +14%YoY

What they filed

Q1 FY27: revenue up 14.7%, net profit up 633.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue596 711 616 591 711 +19%750 +5%680 +10%678 +15%
EBITDA16 49 20 3 41 +156%28 −43%27 +35%25 +733%
Net profit7 38 15 3 28 +300%46 +21%32 +113%22 +633%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹1,870.1 Cr Total
  • India Multi-channel ₹1,236.6 Cr 66.1%
  • Globalbees ₹426.5 Cr 22.8%
  • International (Middle East) ₹207 Cr 11.1%

Guidance & targets

Revenue

  • India Multi-channel Revenue Growth Revenue · FY26 · High confidence early teens
    we strongly believe that we should continue to deliver similar trajectory for the rest of the year as well [referring to early teens growth in July].

    — Supam Maheshwari, MD & CEO

  • International Business Growth Revenue · Foreseeable future · Medium confidence early to mid-teens
    In the foreseeable future, I think, yes [referring to early to mid-teens growth], because that would be a more sort of a sustained number.

    — Abhinav Sharma, Country Head ME

Other

  • Store Expansion (COCO) Other · FY26 · High confidence 90 to 100 stores
    We will add in FY26 close to around 90 to 100 stores, what we added around 90 stores in FY25 as well.

    — Supam Maheshwari, MD & CEO

  • Middle East Store Launch Other · Q2 FY26 · High confidence 1 store in Riyadh
    in the Middle East, we'll be setting up our first store and operating our first store out of Riyadh in Saudi Arabia... Before the end of this quarter, we'll be live.

    — Abhinav Sharma, Country Head ME

Risks & concerns

  • Last-mile delivery ecosystem challenges

    high

    Consolidation in logistics networks shrunk capabilities and impacted customer experience; company is experimenting with local regional partners in 4 cities to mitigate.

    Management acknowledged

  • Macro-economic consumer slowdown

    medium

    Broad-based slowdown in the consumer sector impacted Q1 performance across channels.

    Both acknowledged

  • Geopolitical tensions

    low

    India-Pakistan conflict impacted sales in northern states for about a week in Q1, but is considered a one-time event.

    Management downplayed

Areas of evasion (2)

  • Standard SSSG metrics for offline stores
  • Specific timeline for Globalbees IPO/monetization

Q&A highlights

2 direct
Moderating growth in India Multi-channel business Direct
factual information is that July over July, the performance in India multi-channel has been, in early teens in terms of growth. So I think we are back on quite a good sort of a shape.

Addresses investor concerns regarding the slowdown in the core business by providing a real-time recovery data point.

Asked by Sachin Dixit, JM Financial

Impact of Quick Commerce on the business Direct
the overlap at the category and the brand level is quite small. So, that's what, and that has not changed, per say, from a quick commerce point of view.

Management clarifies that Quick Commerce is not currently a material threat due to limited category overlap.

Asked by Sachin Salgaonkar

SSSG (Same Store Sales Growth) metrics for offline Partial
our model is different from a traditional retail model. At a catchment level, or at a city level, is what we should look at... rather than pure SSSG.

Management continues to resist providing standard SSSG metrics, preferring an omni-channel 'catchment' view which can make organic store performance harder to track.

Asked by Garima Mishra

2 min read 5 chapters

Detailed narrative

India Multi-channel: Navigating Operational Headwinds

The core India business faced a 'perfect storm' in Q1 FY26, with revenue growth moderating to 8% YoY (₹1,236.6 crores). Management attributed this to a combination of macro consumer slowdown, an unusually soft summer due to early monsoons, and a week of lost sales in North India due to geopolitical tensions. Crucially, last-mile delivery challenges impacted the online customer experience. To counter this, FirstCry has initiated logistics experiments in four cities using regional partners, which they claim are already yielding 'much superior growth' and will be expanded in coming months.

Structural Margin Expansion and FCF Milestone

Despite top-line pressure, FirstCry achieved a significant milestone by becoming Free Cash Flow positive at a consolidated level. Gross margins in the India Multi-channel segment expanded by 120 bps to 37.8%, driven by private label (home brand) expansion. While Adjusted EBITDA margin expansion was more modest at 30 bps (reaching 8.6% for India), management explained this was due to temporary de-leverage on fixed costs and higher logistics costs from delivery experiments. They expect these margins to improve as revenue growth accelerates back to 'early teens' levels seen in July.

Globalbees: Strong Organic Momentum

Globalbees continues to be a high-growth engine, reporting 31% YoY revenue growth to ₹426.5 crores. Notably, this growth is entirely organic, as the last acquisition was made in September 2022. Core categories, which represent 95% of the business, grew at over 40% YoY with an Adjusted EBITDA margin of 4.5%+. The overall segment margin of 1% is currently weighed down by the rationalization of non-core brands, a process management expects to complete within the current financial year.

International Strategy: Riyadh Store and Burn Reduction

The International business (Middle East) is successfully executing a 'sustainable growth' playbook, prioritizing unit economics over raw GMV. While GMV grew only 3%, revenue increased by 13% to ₹207 crores, reflecting better conversion and quality of acquisitions. Absolute EBITDA losses were reduced by 30% YoY to ₹21.5 crores. A major strategic shift is the launch of the first physical store in Riyadh, Saudi Arabia, by the end of Q2 FY26, marking the beginning of an omni-channel play in the region similar to the India model.

Omni-channel Synergy and Customer Cohorts

Management emphasized the strength of their multi-channel ecosystem, noting that 38% of customers in the top 20 cities now transact both online and offline. This cross-pollination is a key driver of wallet share. The company also highlighted its preschool business (300+ centers) as a strategic asset that builds brand salience and reduces long-term marketing spend in local catchments. They plan to scale this to 1,000 preschools over time to further entrench their lifecycle-led ecosystem.

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