FirstCry FY26: Growth Holds Up, Profitability Improves, and Execution Moves to Delivery and Stores

Brainbees Solutions Limited, which operates FirstCry, closed FY26 with steady top-line growth and clearer signs of operating leverage. Consolidated revenue from operations rose 12 percent year on year to INR 85,479 million, while adjusted EBITDA increased 24 percent to INR 4,860 million. The reported loss after tax narrowed to INR 2,037 million from INR 2,648 million in FY25. In Q4 FY26, revenue grew 12 percent to INR 21,627 million and the quarterly loss after tax reduced to INR 482 million.

The company also stated that FY26 was free cash flow positive on a consolidated basis. Management reiterated that the India multi-channel business remained PAT and free cash flow positive for the full year. The year’s narrative, across both the investor presentation and the earnings call, was consistent. FirstCry is prioritising long-term profitable growth, even as competitive intensity remains elevated in certain categories and geographies.

Consolidated performance: EBITDA expands even as gross margin softens

On the income statement, FY26 gross margin was 36.2 percent, down from 37.4 percent in FY25. Management attributed margin pressure primarily to two factors in India multi-channel: heightened competitive intensity in the diapering category and a transitory impact in manufacturing due to rupee depreciation and crude-linked raw material prices. Advertising and sales promotion expenses were 8.1 percent of revenue in FY26, slightly lower than FY25’s 8.4 percent, while indirect expenses declined to 6.8 percent of revenue from 7.4 percent.

Despite the softer gross margin, adjusted EBITDA margin improved to 5.7 percent in FY26, up from 5.1 percent in FY25, reflecting better cost control and operating leverage.

Note: INR million figures in the presentation have been converted to INR crore.

India multi-channel: sequential growth improvement, but diapering competition hits margins

India multi-channel remains the dominant contributor, with FY26 revenue of INR 57,533 million. The segment grew 9 percent year on year and delivered adjusted EBITDA of INR 5,051 million, broadly flat versus FY25. The adjusted EBITDA margin for the segment declined to 8.8 percent from 9.5 percent.

Management highlighted that revenue growth improved sequentially through FY26, with quarterly year-on-year growth moving from 7.5 percent in Q1 to 11.4 percent in Q4. Operational metrics also improved. FY26 orders for India increased to 42.8 million from 39.5 million in FY25, and annual unique transacting customers reached 11 million.

The pressure point was explicit. The diapering category continued to see heightened competitive intensity, impacting both growth and gross margin. Management said non-diapering contributes about 85 percent of GMV and remained robust.

A major FY26 focus was execution on service levels and offline productivity.

RocketBees and Qwik: pushing delivery speed as a growth lever

FirstCry expanded RocketBees, its faster delivery initiative, from 22 cities to 62 cities. On the call, management said more than 40 percent of online volumes were being delivered through RocketBees by end of March 2026. The company acknowledged that costs are front-loaded while the network matures city by city, and guided to a temporary impact of about 40 to 60 basis points for a few quarters.

In parallel, FirstCry Qwik expanded to select pin-codes across 5 cities. Management said the initiative began on December 1, 2025, and by end of Q4 it had crossed 20 percent of online orders in the catchments served. The company expects Qwik deliveries to exceed about 10 percent of overall online business over FY27.

Offline channel reset: assortment changes lift growth

Offline GMV grew 15 percent year on year in Q4 FY26. Management attributed this to an offline assortment and product portfolio realignment aimed at improving footfalls and conversion. The rollout is expected to be completed by H1 FY27. For FY27, the company also indicated a plan to open roughly 100 stores through a mix of company-owned and franchise formats.

International (UAE and KSA): growth affected by promotions, but losses keep shrinking

International revenue in FY26 was INR 9,474 million, up 10 percent. The segment’s adjusted EBITDA loss narrowed to INR 907 million from INR 1,401 million, with margin improving to -10 percent from -16 percent in FY25.

Management repeatedly pointed to elevated promotional activity by two horizontal ecommerce players that entered these markets in 2024. Even in that context, the company emphasised sustainable growth and steady loss reduction.

The presentation also highlighted the structural attraction of these markets: higher spend per child compared to India and a higher AOV. For FY26, international AOV was reported at INR 9,067 versus INR 2,284 for India multi-channel.

Globalbees: profitable organic growth and a clear clean-up plan

Globalbees delivered FY26 revenue of INR 18,943 million, up 20 percent. Adjusted EBITDA improved sharply to INR 559 million from INR 221 million in FY25, taking the EBITDA margin to 3.0 percent.

Management stressed that Globalbees has been seeing organic growth since September 2022, when it made its last brand acquisition. A key element of the FY27 plan is to finish rationalising other brands that are low-growth and loss-making. The company stated its endeavour is to complete this rationalisation by Q1 FY27.

Within Globalbees, the presentation separately highlighted core categories performance in FY26: revenue of INR 18,768 million and adjusted EBITDA of INR 919 million post corporate expenses, implying 4.9 percent EBITDA margin for the core set.

What stands out going into FY27

FirstCry’s FY26 set of disclosures leaves three clear investor takeaways.

First, profitability is improving at the consolidated level, with adjusted EBITDA and cash profit rising even though gross margin softened. Second, the India multi-channel plan for FY27 is execution-heavy and measurable, focused on delivery speed, offline assortment, and store expansion. Third, International and Globalbees are both being managed with a clearer emphasis on reducing losses and pruning weaker parts of the portfolio.

Management expects structurally better growth in FY27 in both online and offline channels for India multi-channel. The pace of improvement in service metrics, the ability to sustain offline momentum, and the trajectory of gross margin recovery from manufacturing cost pass-through will be the key signposts for the year ahead.