BrainBees focuses on core categories and stable growth for GlobalBees segment

BrainBees Solution eyes profitability for its GlobalBees segment as it focuses on core categories for improving EBITDA and targeting stable growth.

"Going forward, growth will naturally moderate, but we hope to maintain it around 30%. It should stay strong over the next few years. We’re still a young company with great brands and strong founders," said MD and CEO Supam Maheshwari in a post-earnings analyst call.

GlobalBees' Thrasio-style model gets over 80% of its revenues from its core categories, including home improvement, home appliances, and home and personal care and lifestyle brands.

"The share of these other brands is reducing—from 14% in FY24 to 8% in FY25—as a deliberate strategy. Over time, as this part of the business reduces, we will attempt to make it EBITDA neutral while improving our focus on the core brands. These core brands show disproportionate, high growth—higher than the overall business growth of 30% year on year," he added.

The company invested about Rs 1,590 crore in its core categories, compared to Rs 22 crore in other brands which saw sluggish growth. It sees the segment's EBITDA profile improve over the next 3-5 years.

GlobalBees operates a house of brands model focused on acquiring and scaling smaller ecommerce brands, with baby and mothercare retailer FirstCry holding a 50.73% stake. It reported a 33% year-on-year (YoY) increase in revenue to Rs 398.4 crore in the March quarter, compared with Rs 298.6 crore last year. The segment narrowed its losses marginally to Rs 23.4 crore during the quarter.

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International business faces headwinds

The company's international business witnessed moderated growth due to competitive intensity in the region. The revenue for the segment posted a growth of around 11% YoY during the current quarter. On a full-year basis, it grew about 14% even as its EBITDA improved from -19% to -16% during the year.

"While the losses in absolute terms remain more or less the same, we strongly believe that the peak losses are now behind us. And we will continue to reduce the EBITDA burn, both in terms of absolute value and absolute percentage, quarter on quarter moving forward," shared top executives at the omnichannel retailer.

Temporary slowdown in Indian business

BrainBees sees its 15% YoY growth in the India multi-channel business during the year as a temporary blip brought on by a broader consumption slowdown hurting its offline business. The segment grew 12% on a quarter-over-quarter basis.

"This particular year, or rather this calendar year, starting from January-February, we saw a little bit of a consumer slowdown, especially in the offline segment. We believe that it is not a reflection of the medium-term approach of the overall growth that the industry will demonstrate," noted Maheshwari.

On a consolidated level, it posted 15% YoY growth in its operating revenue to Rs 1,930 crore in the current quarter. During the same period, it clocked a loss of Rs 76.7 crore, compared with the loss of Rs 51.7 crore it posted in Q4 FY24.