Kotak Equities forecasts robust growth for BrainBees: 17% revenue, 30% EBITDA CAGR; initiates 'add' rating
Kotak Institutional Equities expects FirstCry operator BrainBees Solutions to benefit from GlobalBees turning profitable and has initiated coverage on the stock with an ‘add’ rating and a target price of Rs 630.
GlobalBees is a subsidiary of BrainBees, which is expected to scale up rapidly and support growth for its parent company.
“FirstCry owns a 50.2% stake in GlobalBees, a D2C brand aggregator with investments in fast-growing start-ups in the BPC, electronics and accessories segments. GlobalBees reported revenues of Rs 12 billion in FY2024, which we believe can increase at a CAGR of 25.9% over FY2024-27,” said Kotak in its report.
However, it was noted that the profitability prediction is harder, given various underlying businesses, though it is believed that the EBITDA margins of the entity can improve to 5.1% by FY2027 from 0.2% in FY2024.
A large population of young people, high birth rates and a growing demand for branded products are the key demand drivers for FirstCry’s products. A revenue growth of 17% in this business over FY2024-27, driven by growth in customers and AOV is expected.
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