FirstCry, India’s leading online and offline retailer for baby and kids products, has reported a strong growth in its revenue for the financial year 2023, but also witnessed a sharp rise in its losses due to higher expenses.
Revenue grows to Rs 5,632 crore, driven by online and offline sales
According to its consolidated financial statements filed with the Registrar of Companies (RoC), FirstCry’s operating revenue increased by 49.8% to Rs 5,632 crore in FY23, from Rs 3,760 crore in FY22. The company offers a wide range of products for babies, kids, and mothers through its online platform and over 500 physical stores across the country.
The majority of the revenue came from the sale of products, which accounted for 96.8% of the total operating revenue. This segment grew by 49% to Rs 5,451 crore in FY23, from Rs 3,657 crore in FY22. The company also earned revenue from advertising on its website, which increased by 53.7% to Rs 128 crore in FY23, from Rs 83 crore in FY22.
The company also generated other income in the form of interest on fixed and current investments, which declined by 15.3% to Rs 187 crore in FY23, from Rs 221 crore in FY22.
Expenses rise across the board, leading to higher losses
FirstCry’s expenses also grew significantly in FY23, as the company invested in expanding its product portfolio, enhancing its technology, and increasing its marketing and distribution activities.
The cost of materials was the largest expense item, which formed 61.2% of the total expenditure. This cost rose by 50.3% to Rs 3,440 crore in FY23, from Rs 2,288 crore in FY22.
The employee cost for the 14-year-old company also jumped by 58.4% to Rs 537 crore in FY23, from Rs 339 crore in FY22. This included Rs 147 crore as ESOP cost, which is non-cash in nature.
The spending on advertisement grew by 64% to Rs 441 crore, while the courier expenses increased by 60.5% to Rs 98 crore in FY23. The company also incurred Rs 82 crore as subcontractor cost, which pushed FirstCry’s total expenditure to Rs 5,618 crore, up by 56.1% from Rs 3,598 crore in FY22.
As a result of the higher expenses, FirstCry slipped into losses in FY23. It recorded a loss of Rs 474 crore during this period, compared to a profit of Rs 216 crore in FY22. Its ROCE and EBITDA margin also worsened to -0.25% and 3.89% respectively. On a unit level, it spent Rs 1.07 to earn a rupee in FY23.
FirstCry aims to consolidate its leadership position in the kids segment
Despite the losses, FirstCry is well poised to build on its leadership position in the kids segment, which is estimated to be worth $24 billion in India. The company has raised over $500 million in funding so far, from investors such as SoftBank, Chiratae Ventures, and SAIF Partners.
The company has also made several acquisitions to strengthen its offerings, such as Mahindra Retail’s BabyOye, Oi Playschool, and Goodbox. It has also launched its own private labels, such as BabyHug, CuteWalk, and Kookie Kids.
FirstCry is also eyeing the global market, as it plans to launch its operations in Southeast Asia and the Middle East. The company is also reportedly in talks to go public through a US listing, which could value it at over $2 billion.