Can FirstCry Hold Investor Attention In A Quick Commerce World?

At least seven times during FirstCry’s March-quarter earnings call, the company returned to a familiar theme: rationalisation. 

Competition, the management suggested, was behaving irrationally. Discounting in key categories was irrational. Pricing pressures were irrational. The implication was that the current environment was an aberration, one that would eventually correct itself.

Public markets, however, appear far less patient. Since listing in August 2024, shares of Brainbees Solutions, FirstCry’s parent company, have fallen nearly 70% from their peak, wiping out more than half of the company’s market value. Today, Brainbees is worth roughly ₹11,318 Cr.

What’s striking is that the selloff has unfolded even as the underlying business continues to expand. Revenue rose 12% year-on-year to ₹8,548 Cr in FY26, while adjusted EBITDA grew 24% to ₹486 Cr. Losses narrowed from ₹265 Cr to ₹204 Cr, annual GMV crossed ₹11,600 Cr, and existing customers contributed nearly ₹8,930 Cr of that total. 

For much of the last decade, FirstCry represented one of India’s clearest specialist ecommerce success stories. While horizontal marketplaces chased scale across dozens of categories, FirstCry focused on a single consumer: parents. It built an ecosystem around that relationship, selling everything from diapers and feeding products to toys, apparel and baby gear. Along the way, it developed private labels, expanded its offline footprint, forged partnerships with hospitals and maternity clinics, and cultivated a large parenting community.

Today, FirstCry counts more than 11 Mn annual transacting customers, 193 Mn app downloads, 1,189 stores and over 13,500 hospital and maternity-clinic partnerships.

The moat seemed obvious. A first-time parent navigating questions of safety, quality and product discovery was more likely to trust a specialist than a general marketplace. That belief powered both FirstCry’s growth and its valuation.

The problem is that ecommerce has changed. The categories that once naturally belonged to specialists are now being targeted by everyone, from Amazon and Flipkart to Blinkit, Zepto and Instamart. And as convenience, speed and aggressive pricing become increasingly important purchase drivers, investors are beginning to ask whether specialisation alone remains enough.

Shrinking Room For Vertical Ecommerce

The biggest threat to FirstCry isn’t another baby-products retailer. It’s the fact that everyone now sells baby products. Parents can order diapers from Blinkit. Baby food from Instamart. Toys from Amazon. Children’s clothing from Myntra. Strollers from Flipkart.

The categories that once naturally belonged to FirstCry are increasingly available across multiple platforms and often delivered faster. In its earnings call, management explained the pressure on margins, pointing to aggressive discounting in diapers. FirstCry said the category had already shaved roughly 140 basis points off gross margins, a pressure that first emerged in the December quarter and continued into Q4.

“It will take us a couple of quarters for the irrational discounts or irrational intensity to go away. “We believe that its probably a 4-6 quarters sort of a phenomenon,” CEO Supam Maheshwari told analysts. 

The source of the pressure, management argued, wasn’t limited to a handful of players. Asked whether the discounting was coming from specific competitors, Maheshwari replied: “It is not specific… it is across the board. It’s more of a platform phenomenon than a brand phenomenon.”

Investors, however, may be hearing something different. FirstCry’s moat rested on the idea that expertise mattered more than convenience. Parents seeking trusted recommendations, specialised assortments and category depth would naturally gravitate toward a dedicated platform. 

“But when diapers can be delivered in ten minutes, convenience starts competing directly with specialisation. That is perhaps why the management is now focussing highly on logistics,” a former FirstCry executive said. 

The threat from quick commerce might be exaggerated as well. A significant portion of its business comes from fashion and apparel, categories where quick commerce platforms have yet to establish a meaningful presence. The bigger shift may have been in consumer expectations: parents increasingly expect faster deliveries across categories, prompting FirstCry to invest more heavily in logistics and fulfilment.

Throughout the call, FirstCry management also repeatedly highlighted RocketBees and Qwik, arguing that better fulfilment time was already translating into a “clear superior customer experience” and even “incremental growth” in markets where the network had reached scale.

To this end, it is investing heavily in logistics infrastructure to defend market share, even though baby products are slowly becoming commodified and a convenience category rather than a specialist category.

Given this trend flow, the question investors will ask is whether FirstCry’s long-standing moat is strong enough.  That is not easy to answer just yet, but one thing we can say is that its singular focus on parents may not be as powerful as it once was.

According to Aakash Agrawal, associate director, Anand Rathi Investment Banking, the market has become more discerning, but not necessarily more negative, on vertical ecommerce or category specialists. 

He said that businesses with strong category leadership, customer trust, deep engagement and private-label opportunities continue to command investor interest, adding, “What has changed is that investors are now placing greater emphasis on profitability, cash generation and the durability of competitive advantages. The scrutiny has increased, but the model itself remains highly relevant.”

FirstCry’s Answer: Go Deeper, Not Wider

Many companies faced with a changing market try to reinvent themselves. Interestingly, FirstCry is doing the opposite. Rather than pivoting away from its core business, the company is doubling down on the very things that helped it build leadership in the first place, its own brands, its ecosystem and increasingly, its logistics network.

Take private labels. Over the years, brands such as BabyHug, Pine Kids, Cutewalk and Babyoye have moved from being complementary offerings to becoming central to the business. According to the company’s investor presentation, home brands now account for more than 58% of domestic multi-channel GMV, up from around 37% six years ago.

That evolution is easy to understand. Private labels typically offer better margins, greater control over product quality and pricing, and a level of differentiation that third-party brands simply cannot. If every platform sells Pampers, BabyHug is something only FirstCry can truly own.

But the shift also changes how investors view the company and more importantly, how they evaluate its investability. The idea that FirstCry is a platform that connected parents with established brands is simpler and has established operating leverage patterns. But a marketplace mixed with private label or D2C play means investors have to weigh FirstCry against two major sectors. 

Today, an increasing share of FirstCry’s profitable revenue comes from brands that it owns and controls. That may ultimately become the main focus, so should investors simply ignore the loss-making marketplace? That does not seem like an easy ask at the moment. 

Especially those that invested at the time of the IPO, which was not too long ago — less than two years ago. It would not be unreasonable to assume that some investors are holding on since that point. 

For these investors, the value erosion is real and therefore, their questions are arguably more pertinent than those who joined at the beginning of 2026. 

The question has changed from how large FirstCry could become to what kind of company it is becoming.

The shift towards logistics is not happening in isolation. The moderation in online growth was earlier partly driven by delivery-performance challenges as customer expectations evolved in the era of quick commerce. As consumers increasingly came to expect faster deliveries across categories, FirstCry found itself investing more aggressively in fulfilment capabilities. That, in turn, accelerated the company’s focus on RocketBees and FirstCry Qwik, both of which are intended to improve delivery speed and reliability.

The same pattern is visible in the logistics vertical. A few years ago, discussions around FirstCry centred on assortment, category leadership and parenting expertise. Now a significant portion of the conversation revolved around delivery speeds, shipment penetration and network expansion.

RocketBees is said to handle more than 40% of shipments, compared to roughly 28% a year ago, and expects that number to move closer to 45-50% in the near future. MD Maheshwari repeatedly highlighted the impact the network is having on customer experience, noting that markets where RocketBees and Qwik have matured are seeing better retention, stronger acquisition and incremental growth.

JM Financial recently highlighted positive traction in strategic initiatives such as RocketBees, FirstCry Qwik and offline assortment realignment. “These initiatives are already driving improvement in customer experience, delivery metrics and offline footfalls,” the brokerage said, but tempered this with notes on the consolidated gross margin which is under pressure due to elevated discounting in the core category diapers, the depreciation of the Indian rupee and higher raw material costs.

JM Financial maintained its ‘ADD’ rating, although cut target price to ₹265 on the stock, and added that it expects a meaningful pick-up in India-multi channel GMV growth in FY27.

What Investors Are Really Asking

The bear case for FirstCry is a relatively easy sell. Quick commerce is reshaping consumer behaviour. Pricing pressure is hurting margins. Growth has slowed from the levels investors once expected. And as FirstCry leans harder into private labels and logistics, some investors worry it increasingly resembles a retailer rather than a high-growth platform.

“The stock is signalling a debate around moat durability rather than the absence of a moat. FirstCry continues to benefit from strong brand recall, a large customer base, significant omnichannel presence and category expertise. The question investors are asking is whether those advantages can remain as differentiated as they were in the past, given the emergence of alternative channels such as quick commerce, marketplaces and direct-to-consumer brands,” Agarwal said.

In many ways, FirstCry finds itself caught between two eras of ecommerce. The first rewarded category specialists. The next may reward companies that combine specialisation with speed, logistics, brands and convenience.

Management appears to have made its choice. Rather than reinventing the business, it is reinforcing the foundations that got it here—more private labels, deeper ecosystem integration, faster fulfilment and a broader relationship with parents.

Investors, however, are still deciding whether that playbook is enough for the next phase of competition. That is the real debate behind the stock’s decline.

The current valuation suggests the market is pricing in a more moderate growth trajectory than what may have been expected at the time of listing. Investors appear to be factoring in a combination of category maturity, rising competition and changing consumer behaviour. That is not necessarily the same as pricing in a structural decline, but it does indicate expectations of slower and more measured growth compared to the company’s earlier phase of expansion, Agarwal added.

The investors and the company may be focusing on different metrics. While the market appears preoccupied with slowing growth and rising competition, the business itself has continued to improve on several operating parameters, including profitability, cash generation and the growing contribution of higher-margin home brands. The question is whether ongoing investments in logistics and fulfilment can eventually translate into faster growth. For now, investors seem unwilling to give the company the benefit of the doubt until those improvements become more visible in the numbers.

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[Edited by Nikhil Subramaniam]

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