FirstCry Parent Brainbees Solutions Shares Jump 7% As Morgan Stanley, BofA Securities Initiate Coverage

SUMMARY

FirstCry’s parent Brainbees Solutions has been tagged with ‘overweight’ and ‘buy’ rating, respectively, by brokerages Morgan Stanley and BofA Securities

Morgan Stanley gave Brainbees a price target of INR 818 per share, which implies an upside potential of over 27% from the stock’s previous close

The brokerage believes Brainbees is well placed to capitalise on India’s growing childcare market, with its diverse business model presenting multiple levers of growth

A month after making a stellar public market debut, Brainbees Solutions, which operates the kids-focussed omnichannel brand FirstCry, has been tagged with an ‘overweight’ rating by brokerage firm Morgan Stanley.

Initiating coverage on the stock, the brokerage said that Brainbees is well placed to capitalise on India’s growing childcare market. Brainbees’ diverse business model presents multiple levers of growth, giving the company headroom to improve its profitability, according to Morgan Stanley.

Morgan Stanley gave Brainbees a price target of INR 818 per share, which implies an upside potential of over 27% from the stock’s previous close.

Shares of Brainbees Solutions jumped more than 7% during intraday trading today (September 19) to INR 688.9 apiece on the BSE after Morgan Stanley initiated coverage on the stock.

It is pertinent to note that Brainbees made its Dalal Street debut in August, with its shares listing at a 40% premium over its issue price. The stock debuted at INR 651 apiece on the NSE as against the issue price of INR 549.

Despite the stock’s strong performance since its listing, Morgan Stanley believes current valuations indicate further upside.

Meanwhile, BofA Securities has also initiated coverage on Brainbees with a ‘buy’ rating at a price target of INR 770 apiece, implying an upside potential of almost 20% from the stock’s previous close.

The brokerage believes Brainbees is competitively well positioned in a rational mother-baby-kids market and has been improving fundamentals in all businesses.

BofA Securities said that Brainbees’ flagship brand FirsCry is a niche vertical online commerce platform that offers private labels and offline stores, with a presence in the Middle East.

It further pointed out that FirstCry is well placed for sustained growth as India remains one of the few larger economies that has a higher birth rate as compared to countries such as China and the US.

FirstCry’s parent Brainbees Solutions trimmed its consolidated net loss by 31% to INR 75.68 Cr in the first quarter of financial year 2024-25 (Q1 FY25) from INR 110.42 Cr in the year-ago period.

Operating revenue grew 10% to INR 1,652.07 Cr during the quarter under review from INR 1,496.93 Cr in Q1 FY24.