Brainbees Solutions shares rise 4% as Kotak Securities initiates with 'add' rating

Brainbees shares have rallied 15 percent in the past month.

Shares of Brainbees Solutions or Firstcry rallied as much as 4 percent to Rs 624 in morning trade on December 12 after Kotak Securities initiated coverage with a 'add' rating and a price target of Rs 630 citing robust prospects for the company.

With an 'add' call, the brokerage has assigned a price target of Rs 630, forecasting an upside potential of 5 percent from the last closing price of Rs 599 on the NSE. Brainbees shares have rallied 15 percent in the past month.

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The company is India's largest multichannel platform, demonstrating an improving margin trajectory. Globalbees, a brand aggregator associated with Brainbees, has been profitable and positioned for rapid scaling. Kotak projects a 17 percent revenue CAGR and a 30 percent EBITDA CAGR for Brainbees over FY24-27.

In the second quarter, the Firstcry parent posted a revenue of Rs 1,904.9 crore, a 26.4 percent increase from Rs 1,506.88 crore generated in the same quarter last year. The company reported a loss of Rs 62.85 crore, down from Rs 119.4 crore during the same period a year ago. The Pune-based mother and baby products company saw its losses narrow 31 percent from Rs 110 crore in Q1FY24 to Rs 76 crore in Q1FY25.

Previously, Bank of America and Morgan Stanley initiated coverage with a 'buy' and 'overweight' call citing robust growth prospects. Experts say that the company is competitively well-positioned in a rational mother-baby-kids (MBK) market. Brainbees' diverse business model provides multiple levers for growth, with a clear path to profitability. Furthermore, the fundamentals across all its businesses are improving, and margins could deliver a positive surprise.

Brainbees Solution is a new entrant in the primary market as it made its debut last month on August 13. Shares made a robust debut with 40 percent premium and the issue size was Rs 4,193.7 crore.

At about 9:40 am, shares of the company were trading at Rs 618, higher by 3 percent from the last close on the NSE.

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