# 1. Financial Performance ## A. Key Figures * **Revenue:** ₹236 Cr Q2 (+13%) · ₹443 Cr H1 (+21%) * **Adjusted EBITDA:** +51% Q2 · +38% H1 * EBITDA Margin: 9.1% Q2 (+50 bps) · 8.9% H1 (+40 bps) * Gross Margin: 37.4% H1 (+40 bps) · 37% Q2 (-30 bps) * Cash Profit After Tax: ₹71.6 Cr Q2 (+157%) ## B. Revenue Growth * **Robust Top-Line Expansion:** Revenue growth reflects strong organic scale, with H1 growth outpacing Q2 due to post-discount normalization and improved GMV-to-revenue conversion. * **Growth Levers:** Expansion driven by **home brands**, **fashion segment strength**, and **third-party margin improvements**, despite temporary headwinds from platform discounts. --- # 2. GMV & Customer Metrics ## A. Key Figures * **GMV Growth:** **11%** YoY (H1 FY26) · **12%** YoY (Q2 FY26) * AUTC: 11 million TTM (consolidated) (+11% YoY) * **Order Volume:** **8%** YoY (Q2 FY26) · **7%** YoY (H1 FY26) ## B. GMV Trends & Recovery * **Recovery Post-Disruption:** GMV growth rebounded sequentially in Q2 despite early weakness caused by GST-related disruptions and aggressive discounting. * **Normalization Underway:** Business has stabilized with margin targets back on track, supported by improved demand trends even during a subdued festive season. ## C. Customer Expansion & Engagement * **Strong Customer Base Growth:** Annual unique transacting customers reached 1 crore with **double-digit growth** driven by enhanced engagement and omnichannel reach. * **Ecosystem-Led Retention:** Company leverages **India’s largest influencer program** in the母婴 space and partnerships with hospitals and educational schools to deepen loyalty and increase wallet share. * **Repeat Purchase Focus:** Strategic initiatives aim to boost retention and frequency, capitalizing on the inherently high-repeat nature of baby and childcare categories. --- # 3. Segment & Business Performance ## A. Key Figures * **India Multi-Channel EBITDA:** **14%** YoY growth (Q2 FY26) * International Adjusted EBITDA: 51% YoY improvement (Q2 FY26) * **Globalbees EBITDA:** **23%** YoY increase (Q2 FY26) * Preschool EBITDA: 26% YoY growth (Q2 FY26) · Revenue +22% YoY * International Losses: Reduced from ₹39.4 Cr to ₹18.9 Cr (Q2 FY25 to Q2 FY26) ## B. India Multi-Channel * **Resilient GMV Growth:** Sequential improvement in GMV trends despite GST-related demand deferral, with **further acceleration expected in H2 FY26** on delivery expansion and new programs. * **Core Momentum:** Core categories delivered **over 30% H1 growth** with **adjusted EBITDA margins ≥5%**, underscoring strong profitability and strategic focus. * **Omnichannel Strength:** Business remains **PAT and FCF positive**, supported by seamless online-offline integration and leadership in the **mother-baby-kids segment with 1,100+ stores**. * **Strategic Discipline:** Continued rationalization of non-core operations to sharpen focus on **profitable growth** and **retail-brand ecosystem development**. ## C. International Business * **Accelerating Profitability:** Adjusted EBITDA improved **52% YoY** as losses declined sharply, driven by **superior unit economics** and **category mix optimization**. * **Regional Expansion:** First **company-owned store launched in Riyadh (August 2025)** with strong early performance; **UAE and KSA both show sustainable quarterly growth**. * **Margin Playbook Replicated:** Achieved **India-like gross margin levels in 4 years** (vs. 7 in India), with **home brand scaling** and **topline quality** as key levers. ## D. Globalbees Operations * **Profitable Marketplace Growth:** EBITDA up **23% YoY** on strong organic momentum, driven by **top-selling brands on Amazon, Flipkart, and Quick Commerce**. * **Asset-Light Model:** Operates as a **house of brands** with **>95% of value from third-party platforms**, prioritizing marketplace dominance over D2C or corporate branding. ## E. Preschool Segment * **Outsize EBITDA Growth:** Delivered **55% YoY EBITDA increase** on **22% revenue growth**, reflecting operational leverage and efficient scaling. * **Store-Led Expansion:** Focus on increasing **footfall and conversion** in offline stores without compromising gross margin integrity. --- # 4. Delivery & Network Expansion ## A. Key Figures * **In-House Network Coverage:** **4 to 13 cities** (7-month expansion) * **Faster Delivery Penetration:** **0% to 20% of shipments** (6–7 months) · **Target: >50% of shipments** by mid-next year ## B. In-House Logistics Strategy * **Enhanced Control & Experience:** In-house logistics rollout significantly improves **TAT, return rates, and RTO**, with focus on first-mile and mid-mile efficiency for young parents. * **Cost-Neutral Design:** Internal network built to match third-party cost competitiveness long-term, with only **minor bps impact** on unit economics. * **Operational Discipline:** Same-city inventory allocation prioritized to reduce costs and strengthen network performance. ## C. Faster Delivery Rollout * **Rapid Scaling:** Faster delivery expanded to **13 cities** in 7 months, now covering **20% of shipments**, enabling higher marketing efficiency and superior CX. * **Broad-Based Rollout:** Service covers **full product mix** across categories—diapers, apparel, fashion, consumables—supporting holistic growth. * **Market-Led Acceleration:** Expansion driven by rising consumer expectations from Quick Commerce, necessitating faster fulfillment standards. ## D. City Coverage Growth * **Integrated Expansion Model:** Store footprint growth combined with logistics enables **multi-category rollout** in established cities, not limited to specific verticals. --- # 5. Product & Assortment Strategy ## A. Portfolio Realignment * **Strategic Shift to Depth:** Realigning offline product portfolio by H1'FY27, moving from width to depth strategy to enhance **margin flexibility** and **pricing power** while maintaining gross margins. * **Optimized Assortment:** Reducing very wide assortment to adequately wide, increasing depth to capture **economies of scale** and strengthen position as a comprehensive destination for mothers, babies, and kids across all price segments. * **Premiumization Opportunity:** Management open to foreign brand collaboration (e.g., Miniclub model) to elevate cloth quality, expand range, and target **premium customers**, potentially lifting sales. * **Tech-Driven Relevance:** Ongoing investments in **technology and personalization** to deepen engagement across diverse socio-demographic and economic segments. ## B. Home Brand Mix * **Home Brands Momentum:** Home brand contribution on track to reach 55% in FY25, with share **continuously increasing** and driving cross-channel customer loyalty. ## C. Offline Assortment * **Offline Optimization Focus:** Strategic emphasis on **depth over width** in offline channels, with initiatives including focused assortment and tighter pricing to boost **footfall and conversion**. * **Balanced Refinement:** Offline assortment to undergo slight refinement—narrower than online but designed to avoid significant margin erosion. --- # 6. Demand & Market Risks ## A. GST Impact * **Headline:** Strong H1-Q2 growth in India Multi-Channel Business followed by moderation due to customer purchase deferrals post-GST rate reform announcement. * **Headline:** New GST reforms reduced rates to **5%** for nearly one-third of FirstCry’s portfolio, acting as a structural demand catalyst across retail channels. * **Headline:** Gross margin pressure was a one-off event driven by elevated discounts post-GST 2 announcement; margins have since normalized after the festive season. * **Headline:** Management was unprepared for the magnitude of GST-related disruption, which dented growth momentum despite aggressive customer retention efforts. ## B. Quick Commerce Threat * **Headline:** Company holds dominant position as the only organized player in a highly fragmented baby care market with **84% unorganized share**. * **Headline:** Massive demographic tailwinds from **5 crore annual births** and **30 crore children aged 0–12** underpin long-term market expansion potential. * **Headline:** Marketing strategy refocused on **quality customer acquisition** amid rising digital ad costs (CPC, CAC, CPM) to optimize spend efficiency. * **Headline:** Exposure to quick commerce is minimal due to low product overlap; ultra-fast delivery models pose limited threat to core business. --- # 7. Guidance & Outlook ## A. Key Figures * **India Multichannel Revenue Growth (FY26):** **Early teens** (maintained guidance) ## B. H2 Growth Expectations * **Accelerating Momentum:** Growth set to strengthen in H2 FY26 and into FY27, driven by delivery upgrades, portfolio realignment, and enhanced customer experience. * **Strategic Scaling:** Operational scale-up targets **~50% of business coverage by mid-next year**, with full realignment expected by H1 FY27. * **Marketing-Led Expansion:** Increased marketing spend to boost acquisition and retention, supporting sustained growth while maintaining unit economics. ## C. FY26 Revenue View * **Guidance Confirmed:** No change to prior outlook—India Multichannel revenue growth remains on track for the early teens in FY26. ## D. Long-Term Trajectory * **Bullish on Future Growth:** Strong confidence in scaling customer base and cohort quality, with intent to exceed current guidance over time. * **Faster Path to Profitability:** Middle East unit economics showing stronger gross margin progression, indicating **profitability well ahead of India’s 10-year timeline**. * **Growth-Funded Flywheel:** Plan to reinvest in marketing once unit economics are solidified, driving higher growth and **faster burn rate contraction** in H2 FY26 and FY27.