The parent company of FirstCry, faced heavy selling pressure on Wednesday, dropping nearly 7% intraday to a low of ₹221 per share. The sharp decline followed the announcement of the company’s fourth-quarter (Q4FY26) financial results, which presented a mixed operating performance. While FirstCry achieved steady growth in its core India business, continuing pressure on profit margins and intensifying market competition weighed heavily on investor sentiment.
For the March quarter, FirstCry’s India Multi-Channel (IMC) business recorded an 11.8% year-on-year growth in Gross Merchandise Value (GMV), supported by a 9% rise in unique transacting users. Segment revenue also advanced by 11.4% year-on-year to approximately ₹1,490 crore. However, analysts noted that this growth remains below FirstCry’s historical high-teen expansion trajectory.
The primary headwind stems from elevated competition in the crucial diapering category, which accounts for 15% of the IMC GMV. Quick-commerce platforms and aggressive horizontal e-commerce players have ramped up customer acquisition efforts, forcing FirstCry to increase discounting. Consequently, the IMC gross margin contracted by 280 basis points year-on-year, further exacerbated by a weaker rupee and higher crude-linked input costs. The segment’s adjusted EBITDA margin subsequently slid to 7.3%.
On a consolidated level, strong operating leverage and marketing efficiencies provided a partial cushion. Consolidated adjusted EBITDA grew 18% year-on-year to ₹118.7 crore, allowing the consolidated margin to improve slightly by 30 basis points to 5.5%.
Brokerage firm JM Financial maintained an ‘Add’ rating on the stock with a March 2027 target price of ₹265. While analysts view the current input cost surge as transitionary—with potential recovery expected by Q2FY27—they remain cautious about near-term online headwinds and sustained competitive pressures.
