Brainbees Solutions Limited — Q4 FY25 earnings call

Call held 26 May 2025

Management summary

Brainbees (FirstCry) delivered a strong FY25 performance characterized by the core India business turning profitable and cash flow positive. The company is successfully leveraging its 'Home Brand' strategy, which now accounts for over half of India's GMV, to drive margin expansion. While the International segment faces competitive pressure from horizontal players in the Middle East, the Globalbees subsidiary has achieved EBITDA break-even, signaling a shift toward sustainable growth across all business segments.

Highlights

  • Consolidated Revenue for FY25 reached ₹7,600 crores, an 18% increase over FY24.

  • Consolidated Adjusted EBITDA margin expanded 90 bps to 5.13% in FY25, with a 43% absolute increase in EBITDA.

  • India Multi-Channel business turned PAT and Free Cash Flow positive in FY25, with an Adjusted EBITDA margin of 9.5%.

  • Home Brand (Private Label) contribution to India GMV crossed 55% in FY25, up from 37% in FY20.

  • Globalbees segment reported revenue of ₹1,577 crores (up 30% YoY) and turned EBITDA positive at ₹22 crores (1.4% margin).

  • Consolidated Cash PAT witnessed a 484% YoY increase in Q4 FY25 to ₹69 crores.

  • Annual unique transacting customers (AUTC) crossed 10 million, growing 17% YoY.

  • International business (Middle East) revenue grew 14% YoY, with EBITDA losses narrowing from -19% to -16%.

Concerns

  • Competitive Intensity in Middle East

Key financials

  1. Consolidated Revenue ₹7,600 Cr +18%YoY
  2. Consolidated Adjusted EBITDA Margin 5.1%
  3. Cash PAT ₹209 Cr +96%YoY
  4. Gross Margin 37.4%

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
    15% Revenue Growth9.5% Adjusted EBITDA Margin55% Home Brand GMV Share
  • International Business
    14% Revenue Growth-16% Adjusted EBITDA Margin
  • Globalbees
    ₹1,577 Cr Revenue1.4% Adjusted EBITDA Margin7.5% Core Brands EBITDA Margin
  • Others (Preschool)
    ₹42 Cr Revenue24% Adjusted EBITDA Margin

Guidance & targets

Margin

  • India Multi-Channel Adjusted EBITDA Margin · medium to long term · Medium confidence late teens
    We aspire, as in India multi-channel, to be at least, late teens, as an adjusted EBITDA.

    — Supam Maheshwari, MD & CEO

Profitability

  • International Business EBITDA Profitability · within a few years · Medium confidence neutral/profitable
    within a few years, we want to make it profitable, a neutral EBITDA [for Middle East operations].

    — Supam Maheshwari, MD & CEO

Market Share

  • Home Brand GMV Share Market Share · long term · Medium confidence 65% or more

    From 55% today

    we believe, without putting a number, whether it's 65 or more, we will continue to expand our share of home brands.

    — Supam Maheshwari, MD & CEO

Other

  • Delivery Time Reduction Other · near term · Medium confidence 3-4 hours

    From 6 hours today

    in a city, we were delivering same-day delivery, in 6 hours, so our attempt is now to reduce it to 4 hours, or a 3-hour.

    — Supam Maheshwari, MD & CEO

Risks & concerns

  • Competitive Intensity in Middle East

    high

    New horizontal players (like Temu) entering the market with aggressive discounts have impacted order growth frequency.

    Both acknowledged

  • Offline Retail Slowdown

    medium

    Truncated winter and lower footfalls in Jan/Feb impacted Q4 offline performance; management views this as a temporary 'blip'.

    Management acknowledged

  • Globalbees 'Other Brands' Drag

    medium

    Non-core brands in Globalbees have a -31% EBITDA margin, though their share of business is being deliberately reduced (from 14% to 8%).

    Management acknowledged

Areas of evasion (1)

  • Specific timeline for reaching the 'late teens' EBITDA target was kept broad (4-7 years).

Q&A highlights

3 direct
Gap between AUTC and Order Growth Direct
Lesser footfalls, leading to lesser orders, is what we experienced, especially in January and February... which obviously got corrected in March.

Explains the Q4 slowdown in offline retail and confirms that online growth remains robust at 16-18%.

Asked by Videesha Sheth, Ambit Capital

Margin Ceiling and Benchmarking Direct
The companies that we personally aspire and our management team aspire to be is Page Industries, where we can get there.

Management sets a high bar for long-term profitability, targeting 'late teens' EBITDA margins by mimicking high-margin apparel players.

Asked by Percy Panthaki

Globalbees Management and Board Changes Direct
One director resigned 9 months prior to Nitin... they have a typical policy of not being part of a board of a publicly listed or deemed publicly listed company.

Clarifies that recent board exits were due to internal PE/VC policies regarding public companies rather than business distress, and confirms all investors participated in the latest funding round.

Asked by Garima Mishra

2 min read 5 chapters

Detailed narrative

India Multi-Channel: The Profitable Core

The India Multi-Channel business remains the company's primary engine, contributing the bulk of revenue and turning PAT and Free Cash Flow positive in FY25. Adjusted EBITDA for this segment improved to 9.5% for the full year, up from 8.8% in FY24. Despite a slight moderation in Q4 due to a truncated winter affecting offline sales, online GMV growth remained steady at 16% for the quarter and 18% for the full year.

Home Brand Strategy as a Margin Lever

FirstCry's 'Home Brands' (private labels like BabyHug and PineKids) now account for 55% of India's GMV, a significant increase from 37% in FY20. These brands grow at a rate 50% higher than the overall India business. Management believes this share can eventually reach 65% or more, as there are few large competing brands in the fragmented kids' fashion space, providing a clear path to 'late teens' EBITDA margins.

Globalbees Reaches EBITDA Break-even

Globalbees reported a significant turnaround, achieving a positive Adjusted EBITDA of ₹22 crores in FY25 (1.4% margin) compared to near-zero in FY24. The company is focusing on its four core segments, which boast a 7.5% EBITDA margin, while deliberately shrinking 'other brands' that currently drag performance with -31% margins. Revenue for the segment grew 30% YoY to ₹1,577 crores.

International Expansion Faces Competitive Headwinds

The Middle East business grew revenue by 14% in FY25, but order growth slowed to 8% YoY in Q4 due to increased competition from horizontal e-commerce players. Management is resisting a 'burn-led' growth strategy, choosing instead to focus on replicating the India playbook of building home brand penetration. EBITDA losses narrowed to -16% for the year, with a goal to reach break-even within a few years.

Omni-channel Synergy and Customer Stickiness

New disclosures reveal that 38% of GMV in FirstCry's top 20 cities comes from cross-channel customers who shop both online and offline. This multi-channel approach acts as a moat against pure-play online competitors. Furthermore, long-term cohorts show exceptional stickiness; customers acquired in FY13 have generated 7.9x their initial year GMV over a 12-year period.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Consumer Services earnings calls