Business News

Shares of FirstCry-operator Brainbees Solutions climbed as much as 4% on Friday to Rs 630 on BSE after brokerage firm JM Financial initiated coverage on the stock with a ‘buy’ rating at a target price of Rs 692, implying potential upside of 9.8% from current levels.The brokerage highlighted FirstCry’s dominant position in India’s childcare market, commanding over 24% of the online segment and holding significant offline traction with 1,124 physical stores across 500 cities. The company’s strategic focus on home brands such as BabyHug, coupled with its COCO (company-owned, company-operated) store expansion, is expected to drive gross margin improvements of about 6.5% by FY28, the brokerage said.JM Financial also shed light on FirstCry's international growth potential, noting its success in the UAE and Saudi Arabia. “The UAE business is already profitable at the adjusted EBITDA level, and the KSA business is likely to follow suit within two years,” JM Financial said. The brokerage underscored the potential of the company’s Globalbees platform, describing it as “the largest and only profitable D2C roll-up play in India.”Brainbees Solutions reported robust financial growth with a 38% revenue CAGR from FY21 to FY24, turning EBITDA profitable in FY21. JM Financial forecasted a 20% CAGR in revenue and a 51% CAGR in adjusted EBITDA from FY24 to FY29, underpinned by increased operational efficiency and strategic investments.In the quarter ended September 2024, the company narrowed its consolidated net loss to Rs 50 crore versus Rs 101 crore in the year ago period. The losses were also down from Rs 57 crore from the previous quarter and attributable to the owners of the company.However, JM Financial flagged risks such as cannibalization from COCO store expansion, execution challenges in international markets, and increased competition from platforms like Meesho. Despite these risks, the brokerage said it remains optimistic about the company’s ability to sustain long-term growth, driven by its replicable playbook, innovative product portfolio, and experienced founder-led management.Also read | Demergers to watch out for in 2025: ITC, Vedanta, 3 others(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Shares of Sagility India today rallied 5% in early trade to hit its upper circuit and a fresh all-time high of Rs 46.09 on the BSE as global brokerage firm Jefferies initiated coverage on the stock with a ‘buy’ rating and a target price of Rs 52. The target indicates an upside potential of 18% for the stock from its previous closing price.The foreign brokerage firm highlights Sagility’s strong positioning to deliver consistent double-digit revenue growth in the coming years.“Sagility is poised to benefit from the normalization of depreciation and amortization (D&A) costs and deleveraging, which are expected to drive earnings per share (EPS) growth,” said Jefferies in its note.The firm has projected a robust performance for Sagility over FY25-27, anticipating a compound annual growth rate (CAGR) of 12% in revenue and 40% in profit after tax (PAT).Jefferies also noted that the normalization of D&A costs and reduced leverage will significantly contribute to operational efficiency. This, coupled with a strong outlook for earnings growth, is expected to sustain Sagility's current price-to-earnings (PE) multiples.Also read: International Gemmological Institute IPO listing today. GMP hints at solid gainsWith its focus on the US healthcare sector and strategic initiatives to enhance profitability, the global brokerage firm believes that Sagility is well-positioned to capitalize on growth opportunities in the BPM industry.In the last one month, the shares of Sagility India have gained 57.6% and have increased by 16.3% and 15.2% in the last 2 weeks and 1 week respectively, according to the BSE analytics.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)