Shares of Brainbees Solutions, the company behind FirstCry, went up by 4% to Rs 630 on the BSE. This happened after JM Financial, a brokerage firm, started recommending the stock with a ‘buy’ rating and set a target price of Rs 692. This means the stock can possibly increase by 9.8% from its current price.
FirstCry is a big player in India’s childcare market, holding over 24% of the online section and having 1,124 physical stores in 500 cities! The company has its own popular brands like BabyHug and is expanding its stores directly. JM Financial believes this will help the company increase its profit margins by about 6.5% by FY28.
The firm also thinks FirstCry can grow internationally, especially after seeing success in the UAE and Saudi Arabia. The UAE side is already making money, and Saudi Arabia is expected to do the same in about two years. JM Financial also praised FirstCry’s Globalbees platform, stating it’s the largest and only profitable D2C roll-up in India.
Brainbees Solutions has shown strong financial growth, with revenue increasing by 38% from FY21 to FY24, and started making profits in FY21. The brokerage forecasted a 20% annual increase in revenue and a 51% annual increase in adjusted profit from FY24 to FY29. This growth is expected due to better efficiency and smart investments.
In the latest quarter ending September 2024, the company reduced its net loss to Rs 50 crore from Rs 101 crore a year before and down from Rs 57 crore since last quarter. However, there are some concerns like the risk of losing customers from new stores, challenges in foreign markets, and competition from rivals like Meesho.
Despite these challenges, JM Financial stays positive about the company’s long-term growth, relying on its successful strategy, innovative products, and experienced leadership.
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