Brainbees Solutions Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Brainbees (FirstCry) delivered a strong Q2 FY26 characterized by significant margin expansion and aggressive loss reduction in international markets. While India Multi-Channel growth was briefly moderated by customer deferrals following GST reform announcements, management remains bullish on H2 recovery. The company is pivotally shifting toward an in-house logistics model to enhance customer experience and unit economics.

Highlights

  • Consolidated Adjusted EBITDA grew 51% YoY in Q2 FY26, with margins expanding to 5.8% from 4.2%.

  • India Multi-Channel GMV increased 12% YoY in Q2, despite temporary headwinds from GST reforms.

  • International business losses reduced by 52% YoY to ₹18.9 crore, with gross margins expanding 300bps to 26.3%.

  • Globalbees reported 21% YoY revenue growth in H1 FY26, with core categories growing at 30%+.

  • In-house delivery network expanded from 4 to 13 cities, now covering 20% of shipments.

  • Cash Profit After Tax for India Multi-Channel reached ₹71.6 crore, a 157% YoY improvement.

  • Annual Unique Transacting Customers (AUTC) reached 11 million, up 11% YoY.

Key financials

  1. Consolidated Revenue 10% +10%YoY
  2. Consolidated Adjusted EBITDA 51% +51%YoY
  3. Consol Adjusted EBITDA Margin 5.8%
  4. India Multi-Channel GMV Growth 12% +12%YoY
  5. India Multi-Channel Cash PAT ₹71.6 Cr +157%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

  • India Multi-Channel
    14% Adjusted EBITDA Growth9.1% EBITDA Margin37% Gross Margin
  • International
    ₹236 Cr Revenue13% Revenue Growth52% Loss Reduction26.3% Gross Margin
  • Globalbees
    14% Revenue Growth (Q2)1.6% H1 Adjusted EBITDA Margin30% Core Category Growth
  • Others (Preschool)
    22% Revenue Growth55% EBITDA Growth

Guidance & targets

Revenue

  • India Multi-Channel Revenue Growth Revenue · FY26 · High confidence early teens

    From early teens today

    We definitely believe that we should be somewhere there. Hopefully better than what we have said.

    — Supam Maheshwari, MD & CEO

Other

  • In-house Delivery Coverage Other · by mid-next year · High confidence 50%
    Our endeavor will be by mid-next year, we'll be able to take it to almost 50% of our business.

    — Supam Maheshwari, MD & CEO

Margin

  • Offline Product Portfolio Realignment Margin · H1 FY27 · Medium confidence Full Implementation
    We have done some experimentation, but the whole change will be actually applicable somewhere around H1’FY27.

    — Supam Maheshwari, MD & CEO

Market context

  • Globalbees Brand Rationalization Other · next couple of quarters · Medium confidence Completion
    Our endeavor is to complete this rationalization of other brands within the next couple of quarters.

    — Anuj Jain, CEO Globalbees

Risks & concerns

  • GST Reform Impact

    medium

    New GST reforms caused customers to defer purchases from mid-August to late September, requiring higher discounting.

    Management acknowledged

  • Marketing Headwinds

    medium

    Management noted strong headwinds for increased rates in CPCs, CACs, and CPMs in international markets.

    Management acknowledged

  • Logistics Unit Economics

    low

    Concerns over whether in-house delivery will dent profitability; management claims it will be cost-neutral in the medium term.

    Analyst downplayed

Areas of evasion (1)

  • Specific growth profile numbers for the 13 cities with faster delivery were described as 'significantly higher' but not quantified.

Q&A highlights

3 direct
Offline Product Realignment (Depth vs Width) Direct
Instead of playing with a width strategy, we'll be playing more of a depth strategy, enabling us more margins which we will be able to pass to the customer.

Reveals a strategic shift in offline retail to improve inventory turns and margins by focusing on high-volume assortments.

Asked by Videesha Sheth, Ambit Capital

Impact of Quick Commerce Direct
Our overlap with Quick Commerce remains small... However, the quick commerce has led to an increase in consumer expectation when it comes to on-time delivery.

Management acknowledges that while direct competition is low, quick commerce is forcing a massive investment in their own delivery speeds.

Asked by Ashok

India Gross Margin Compression Direct
Gross margin dip is a one-off thing, which is a result of giving away higher discounts, to drive better conversions after the GST 2 was announced.

Explains the 30bps margin dip as a tactical response to a regulatory event rather than a structural decline.

Asked by Ashok

2 min read 5 chapters

Detailed narrative

Consolidated Profitability and Efficiency

Brainbees achieved a significant milestone by remaining PBT positive (adjusted for ESOP) for both Q2 and H1 FY26. Consolidated Adjusted EBITDA surged 51% YoY in Q2, driven by improvements across all business segments. The company also maintained a positive free cash flow position for the first half of the fiscal year, signaling a transition from a high-burn growth phase to a more sustainable, profitable model.

India Multi-Channel: Navigating GST Headwinds

The India business faced a temporary challenge as customers deferred purchases following the announcement of new GST rate reforms in mid-August. To counter this, FirstCry increased discounts, leading to a slight 30bps dip in gross margins to 37%. However, GMV still grew 12% YoY in Q2, and management expects sequentially better growth in H2 FY26 as demand has normalized post-festive season.

International: Rapid Path to Break-even

The International segment (UAE and KSA) showed the most dramatic improvement, with losses narrowing by 52% YoY to ₹18.9 crore. Gross margins expanded by 300bps to 26.3% through a better product mix and higher home brand share. Management highlighted that the Middle East business has achieved in 4 years the gross margin levels that took the India business 7 years to reach, suggesting a much faster path to profitability.

Logistics Strategy: The In-house Delivery Pivot

A key strategic initiative is the expansion of the in-house delivery network from 4 cities to 13 cities in just seven months. This network now handles 20% of total shipments, with a target to reach 50% by mid-next year. Management believes this shift is critical to meeting consumer expectations for speed (influenced by quick commerce) while reducing RTOs (Return to Origin) and improving customer retention.

Globalbees: Organic Growth and Brand Focus

Globalbees delivered 21% YoY revenue growth in H1 FY26 with an adjusted EBITDA margin of 1.6%. Growth is entirely organic, as no acquisitions have been made since September 2022. The company is currently rationalizing its portfolio to focus on core categories, which are already operating at 5%+ adjusted EBITDA margins and growing at 30%+ YoY.

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