FirstCry's Q2 and H1 FY26: Navigating Growth with Strategic Precision

Brainbees Solutions Limited, operating under the popular FirstCry brand, has delivered a robust performance for the second quarter and first half of Fiscal Year 2026, showcasing strategic resilience amidst evolving market dynamics. The company reported being PBT (Profit Before Tax) positive, adjusted for ESOP costs, across both Q2 and H1 FY26. A standout achievement was the consolidated Adjusted EBITDA, which surged by an impressive 51% year-on-year in Q2 FY26, reflecting broad-based improvements across all business segments. Furthermore, FirstCry maintained its positive free cash flow status for H1 FY26, underscoring its strong operational efficiency and financial health.

The India Multi-Channel business, a cornerstone of FirstCry's operations, demonstrated sequential improvement in its year-on-year GMV (Gross Merchandise Value) growth rate, despite a temporary deferral in consumer demand caused by the implementation of new generation GST reforms. The company proactively addressed this by increasing discounts, ensuring customer engagement. With ongoing expansion of its faster delivery initiative and the scale-up of new offline strategies, management anticipates an even stronger GMV growth rate in the second half of FY26. This segment continues to be PAT and Free Cash Flow positive in H1 FY26, highlighting its sustained profitability.

Financial Highlights: A Snapshot of Performance

Note: All figures are consolidated metrics. Adjusted EBITDA is for share-based expenses and Globalbees salaries/wages. Cash Profit After Tax is adjusted for non-cash and exceptional items.

Segmental Performance: Driving Growth and Efficiency

The International business, primarily operating in the UAE and KSA, delivered another quarter of sustainable growth while significantly improving its Adjusted EBITDA. The segment successfully reduced its losses by 52% year-on-year in Q2 FY26, from INR 39.4 crore in Q2 FY25 to INR 18.9 crore in Q2 FY26. This impressive turnaround is attributed to optimizing the topline mix, achieving superior GMV to revenue conversion, and enhancing gross margins by 300 basis points. The company's strategy of replicating its successful omnichannel playbook in the Middle East, including the recent opening of a 'FirstCry' branded COCO store in Riyadh, KSA, is showing promising early results.

Globalbees, FirstCry's house of brands, continued its strong organic growth trajectory. Core categories within Globalbees were the primary drivers of this momentum, contributing significantly to both growth and profitability. These core categories witnessed over 30% revenue growth year-on-year in H1 FY26 and maintained healthy Adjusted EBITDA margins above 5% post-corporate expenses. While the overall growth and margins were somewhat impacted by the ongoing rationalization of 'Other Brands,' management expects this process to conclude within the next couple of quarters, paving the way for accelerated performance.

Strategic Initiatives and Future Outlook

FirstCry is actively pursuing several strategic initiatives to sustain its growth and enhance profitability. The new generation GST reforms, which have seen approximately one-third of the portfolio transition to 5% GST, are expected to stimulate demand across the retail sector. The company's faster delivery initiative has expanded from 4 to 13 cities, significantly improving Turnaround Time (TAT) and customer experience. This network is projected to cover half of all shipments by mid-next year, further boosting growth and customer retention.

In the offline channel, FirstCry is realigning its product portfolio to cater to a broader audience, aiming to increase footfalls and conversion rates by H1 FY27. This depth-focused strategy is designed to enhance margins without compromising the overall gross margin profile. Management's proactive approach to adapting its international playbook based on public market feedback, focusing on sustainable growth and unit economics, underscores its commitment to disciplined execution.

Conclusion: A Path of Disciplined Growth

FirstCry's Q2 and H1 FY26 results reflect a company that is not only growing but also strategically refining its operations to enhance profitability and customer experience. Despite external challenges like GST reforms, the management's transparent acknowledgment of issues and swift implementation of corrective measures, such as expanding delivery networks and optimizing product portfolios, demonstrate strong leadership. The consistent improvement in Adjusted EBITDA, positive free cash flow, and the disciplined approach to international expansion and brand rationalization position FirstCry for continued success. The company remains bullish on its future, anticipating better growth in the coming quarters and fiscal year, driven by its robust ecosystem and unwavering focus on the parenting journey.