Brainbees Solutions Limited (FIRSTCRY) Q3 FY2026 Earnings Call Transcript & Summary

Good evening, everyone. Welcome to Brainbees Solutions Limited Q3 and 9 months FY '26 Earnings Call. This is Anish Arora, and I have with me Mr. Supam Maheshwari, Managing Director and CEO of the company; Mr. Gautam Sharma, Group Chief Financial Officer; Mr. Vivek Goel, Chief Business Officer of the company; Mr. Abhinav Sharma, Country Head of Middle East Business Operations; and Mr. Anuj Jain, CEO of Globalbees. Kindly note that this call is meant for analysts and investors of the company. We wish to highlight that the call is being recorded and by participating in this event, you consent such recording, distribution and publication. [Operator Instructions] We'll be covering the presentation in the beginning of the call, and we'll thereafter open for the Q&A forum. We would like to point out that some of the statements made in today's call may be forward-looking in nature, and the disclaimer to this effect has been included in the investor presentation shared with you. With this, I request Mr. Supam Maheshwari to take it over.

Good evening, everyone. Once again, welcome to our Q3 performance, and 9-month performance for FY '26. We'll be covering both quarter 3 and 9 months as well as the segmental performance of all our 4 business segments. Financial summary, business overview and some of the supplementary information is attached in the presentation uploaded. So just straight diving into the Q3 and 9 months. Happy to share that we've been PAT positive on a consol level for the quarter 3 FY '26, adjusted for ESOP cost. Also for the 9 months, adjusted EBITDA has been increased from 25% year-on-year basis, and we continue to remain cash flow positive for 9 months FY '26. On segmental updates, India multichannel business witnessed sequential improvement, as we had promised in our earlier calls as well, despite relatively muted consumer sentiment. If you look at the right-hand side, you will notice that we had on quarter 1, 7.5% year-on-year growth, quarter 2, 7.9%, and quarter 3 had been 8.9% growth, and we faced certain challenges around supply chain volatility. Otherwise, our growth would have been around 11% for quarter 3 year-on-year basis. We have undertaken a lot of initiatives that we have spoken about in the past. We will speak more during the course of the presentation. We strongly believe that the -- with those initiatives, structurally, our growth rate for both online and off-line channels will remain much superior in FY '27 as those initiatives would have taken certain scale and size. We continue to remain in PAT and cash flow -- free cash flow positive in India multichannel for the 9-month FY '26. For the international business, we witnessed elevated promotional activities led by the 2 horizontal commerce, e-commerce players that we have spoken about a few quarters back as well. However, we have continued to remain laser focused on sustainable growth and not participating in those events and maintaining our focus towards reducing our adjusted EBITDA losses, and which has reduced by 25% year-on-year basis for quarter 3 FY '26 and 36% for the 9 months FY '26. Globalbees delivered another strong quarter of organic and profitable growth. Core categories delivered 30% year-on-year growth in 9 months FY '26 and an adjusted EBITDA of close to INR 70 crores post corporate expenses. Moving further, you will see these are snapshots for our console business. AUTC grew by 10%. And GMV for our online, offline and international business grew by 10% and revenue from operations grew by 12% and adjusted EBITDA, our consol business stands at 6.3% and India multichannel at 10%. Cash profit after tax grew year-on-year for quarter 3 on 23%. For the 9-month performance. On the consol basis, AUTC again grew by 10%. Revenue from operations grew by 11% over 9 months compared to last year, 9 months. And our consol adjusted EBITDA grew by 25% year-on-year basis and India multichannel at 9.3% and cash profit for 72% on an equivalent 9-month basis. With that, I would like to sort of move to the segmental performance and hand over to Vivek for talking about our India multichannel segmental performance. Vivek?

Good evening, everyone. I'll share some key updates about the India multichannel business. So as Supam also mentioned that we saw sequential improvement in year-on-year growth rate for the revenue, and this was despite a bit of muted consumer sentiments in Q3 that we witnessed. We also [indiscernible] which contributes to 85% and continues to perform well. We've also witnessed, as Supam was mentioning, some supply chain volatilities in a few [indiscernible] categories.

Vivek, we missed last 15, 20 seconds. If you would -- if you don't mind, can you please speak from the point 2 again?

Sure, sure, sure. Am I audible?

Yes.

Yes. So as I was mentioning, that we witnessed some heightened competitive intensity in diapering category during the quarter, which led to pressure on growth and margins. Our nondiaper portfolio, which contributes to 85%, about 85% of our GMV, remains robust and continues to perform well. We also witnessed, as Supam had mentioned, some supply chain volatilities in few select categories, which impacted overall growth by 200 bps in quarter 3 FY '26. Anish, if we can move to the next slide. So we saw about 9% growth in quarter 3 FY '26. At a 9 months level, we saw about 8% growth. And if I talk about adjusted EBITDA, at a 9-month level, we saw a growth of about 6% to INR 395 crores. Supam, do you want to take this slide?

Yes. So I think I just wanted to give you the new initiative updates that we had been talking about a few of them and a few new ones -- one significant new one that we'll speak about. As in last few quarters, we have mentioned that we had some customer experience issues to third-party logistics service providers, and we had taken our own logistics initiative to serve our customers. And last time when we had talked about, we had expanded our logistics service, we branded in RocketBees, that's our own internal in-house logistics initiatives. And this is a totally asset-light model, we have spoken about in the past. We maintained the entire tech stack here. These are third-party dedicated service providers who are working on that tech stack, regional local ones to be able to work with us directly and digitally work for FirstCry shipments. This RocketBees initiative has expanded in less than 9 to 10 months from the time we started from scratch. Last time when we spoke about, we had expanded to 13 cities. Now we have expanded by December end to 22 cities. And happy to share that with this increased volume and increased number of cities, we have witnessed 20% improvement in delivery tax resulting in much superior growth and customer experience that we had started this initiative. We continue to expand this. We believe we should be able to cross close to around 45% to 50% of our total volumes by the middle of this year. So this is an initiative on RocketBees, which has given us tremendous boost, and will continue to give us a superior customer experience in times to come. While we built this architecture of RocketBees and our own delivery initiative, we had also been cognizant of the fact that customers in India overall has been experiencing, and desire to get the products much faster than has been traditionally being served a few years back. And over the next few years, that desire to get products much faster will continue to only increase and improve. With that in mind to cater to those expectations of the customers, we started a new initiative called FirstCry Quick. We are currently underway on a pilot in 3 cities in Pune, Bangalore and Hyderabad, where we not only serve our diapering category, but service all other full range of products, including baby care, nurseries, fashion, toys, everything that we normally serve across all categories. And this FC Quick model has been set. We are leveraging our entire -- in these 3 cities as a pilot in few pin codes, we're leveraging our COCO stores to begin with, and a few of our stockist network, and also we'll be extending into the dark stores. With that, we believe, over a period of time, we'll be able to leverage our 1,200 stores over a period of time once we streamline the entire tech product as well as the supply chain ops for the entire FC Quick to be able to deliver all products. Currently, we are promising 3 hours as a promised delivery. We intend to reduce it at promised delivery over a period of time. The objective here is to ensure that we remain future-proof, foolproof in terms of being able to meet customer expectation, while RocketBees will continue to serve across over a period of time, a large number of cities, not just only a few hours, but SDD, NDD and across states deliveries as well. FC Quick is a pure few hours delivery is what we are endeavoring to deliver to cater to the future requirements of our young mothers and young fathers. Third initiative that we have spoken in the past is going to take shape in SS-26, which will help us address more footfalls, more conversions through realigning product portfolio by getting into a width to a depth strategy. Part of our product portfolio will move to a depth strategy, releasing the COGS benefit to MRP reduction, catering to a wider audience and enabling us to have better conversions. So with all these 3 initiatives, we remain super, super confident about structurally deliver superior growth in FY '27 once these all 3 initiatives are fully rolled out. Yes. I think -- yes, I'll hand over to Abhinav, for our international business update.

One second. I think I have a glitch. Can you hear me, guys?

Yes, yes.

All right. Good evening, everyone. So our story for Q3, looking back at Q3 this year, we witnessed, as Supam had mentioned in this first slide, we witnessed very elevated promotional activities led by the 2 horizontals that we've spoken about in the previous quarters as well. However, we, on our part, stayed relentless with razor-sharp focus on not participating in that kind of a frenzy or negative spiral as we call it and wanted to ensure that we are on a path to sustainable growth with improvement in our gross margins. Anish, next slide, please. So having said that, we expanded our gross margins in like-for-like quarters by 150 bps and over a 9-month comparative period by 180 bps. We also saw a reduction in our EBITDA losses from 15% to 11% in percentage terms and in absolute value, about 25% reduction like-for-like quarters. The same in the 9-month comparative period, we reduced our losses from 7% to 10%, and in absolute value by about 36%. So the trend -- if you look at the trend, the path that we've sort of stayed sustained over the last few quarters, as we've discussed previously, we've seen reductions or improvements rather in our EBITDA losses from -- right from FY '23 to FY '25, we've reduced our losses by 831 bps. And if you compare FY '25 over the 9-month period of FY '26, we've reduced it by 705 bps. So very sustained focus on both, a very sustained healthy top line sort of growth. When I say healthy, I mean, looking at ensuring that EBITDA losses quarter-on-quarter and year-on-year are reducing as we speak. Over to you, Anuj.

Thanks, Abhinav. Good evening, everyone. Here's the update on Globalbees. As you are aware, over the last few quarters, we've been speaking about rationalizing certain brands because they were delivering a relatively lower revenue growth as well as incurring losses. And we believe that we should be able to complete this rationalization in the first quarter of FY '27. Therefore, we'll first focus on the core categories performance for 9 months FY '26. We did a revenue of INR 1,417.4 crores, which was a 30% year-on-year growth. If I were to compare this to H1 as well as quarter 1 of this year, we were at very similar levels of growth of 30%. So as of now, we're delivering pretty consistent 30% growth. The EBITDA was -- adjusted EBITDA was INR 69.8 crores, which is 4.9%. If we look at the consolidated view it's been a good quarter, and it's been a good 9 months. In the last quarter, we delivered a 22% growth from INR 422.3 crores to INR 515 crores. And even on a 9-month basis, the growth has been 22%. So again, the overall story of growth is consistent across the year. All of this growth has been organic. The last acquisition that we made was in September 2022. Moving on to the adjusted EBITDA. The adjusted EBITDA for the last quarter grew by 147% year-on-year and moved from 1.4% in the previous year to 2.9% this year. If I look at it on a 9-month basis, we grew by 54% and from 1.6% in the previous year to 2% this year. We just look at the overall trend of EBITDA -- adjusted EBITDA that we've seen over the last few years. In FY '23, we were at minus 5%. In FY '24 and '25, we moved to 0.1%. And in this year's 9 months, we're at 2%. However, again, looking at, if I were to remove the brands that we are rationalizing and if I was to focus only on the core categories, the adjusted EBITDA becomes 4.9%. So that sums up the Globalbees update.

So this is the consol performance of all the segments put together. So while 3 segments was just explained by Vivek, Abhinav and Anuj, the sports segment, which is -- which primarily represents our school business, it continues to perform very well. For the 3 months ended 31st December, if I talk about the EBITDA growth, EBITDA growth has seen a jump of 40% year-on-year. And if I talk about the 9 months growth in the EBITDA, it is roughly around 27%. In terms of percentage of EBITDA to the revenue, for the Q3, the EBITDA was roughly around 31%. And for the 9 months, it stands around 27%. So that continues to perform very well. So if we add all the 4 segments, what we get is our 12% year-on-year growth in Q3, INR 2,172 crores, increasing to INR 2,423 crores. Similarly, if we talk about the 9 months performance, a growth of 11%. There is some dip in the gross margins, as presented and talked about in the previous slides, largely because of some decline in our India multichannel business gross margins, which is largely because of heightened competitive intensity, especially in the diaper category that we have seen in Q3. And the second one is a drop in gross margins in Globalbees business. While it continued to improve EBITDA, the gross margins has reduced because of 2 reasons. One is a drag on gross margin because of the other categories, which is noncore, other than the core categories. And the second 1 is some change in the revenue recognition policy of Flipkart that has reduced the margin. However, on an EBITDA level, Globalbees continue to perform very well. With this gross margins and the revenue growth, what we achieved in terms of EBITDA is a 25% year-on-year growth for the 9 months FY '25 -- FY '26 over FY '25, which is from 5.1%, we have reached 5% -- 5.8% of EBITDA. All the business segments continue to see EBITDA growth on a 9 months basis, India multichannel increasing by 6%, Globalbees increasing by 47%, school increasing by 27% and international business, the losses have come down by almost 36% in 9 months. So all the 4 business segments has contributed to the improvement in this EBITDA.

We are happy to take questions.

Thank you, team. [Operator Instructions] The first question is from Mr. Sachin Dixit.

I have 3 questions. The first one was on our brand partnership right? So while yes, we are struggling with growth for sure, but I also noticed that in the 9-month FY '26 period, the number of brand partners we have is actually lower than what we had last year. What is happening there? Is it also driving some of the headwinds that you are facing?

Yes. So you want to complete the -- okay, we can address this particular point. We're talking about from some 8,000 number to something, some numbers 7,800.

Yes, 7,800, yes.

That's absolutely, that point needs to be ignored because those brands don't even contribute less than 0.5% of our revenue. So we can continue to ignore that. That's -- we are rationalizing at our end to be able to manage our own curation in a much smarter way.

Understood. I mean, largely for most marketplaces, one would be anticipating that the number of brands goes up rather than goes down.

No, Sachin, that's not a metric that really impacts us. So nothing to -- it's completely to be ignored because that's not -- the brands that are -- there are a lot of mompreneur brands, and there are a lot of new brands that come and go, they completely get wiped out over a period of time in their own journey. A lot of entrepreneurs, young mompreneur as well. So we can't continue with them once they can't give us the sort of customer experience or the products that we are requiring for. So we take those calls as well in terms of curation of the brands that we are catering to the customer for our customers. So -- but these are long tail, I would say the far end of the long tail, so nothing to worry about at all. No impact here. Zero.

Yes. Okay. On the second question on supply chain initiative, right, I mean, obviously, I think this question has come up earlier as well, you had Xpressbees, which, as far as media reports suggest is faltering, and now you are again doing RocketBees. Do you -- I mean, how certain are you that you really need to build this, right? I mean, as far as the broader e-commerce goes, most people are happy with third-party logistics. One large player, which is shipping like 2 billion shipments is probably doing in sourcing, which makes sense probably at that volume, but for your volume, how certain do you feel it is needed, and especially in the light that we have highlighted supply chain issues now for 2 quarters in a row. So we'll love some color there.

Sure. So, Sachin, if you look back in the last 2 quarters that we have talked about, third-party logistics is hugely dominated by -- their demand is dominated by players like [indiscernible] and others. And the customer sensitivity of -- and I don't wish to mention that there is no distinguished service for a player like us versus someone else. So while we are very, very particular the kind of customers that we are catering to is far more particular in Metro Tier 1, Tier 2 or Tier 3, whereas players who are dominating the demand of some of these LSPs are on the Tier 3 plus. So the consistency of service doesn't exist there and our customers are suffering. So we had to take things. We waited for quite some time. I think I acknowledged in the last call as well that we were late. But I think we had to take things in our own control in terms of being able to provide that kind of a service, which customers will love, and these are young moms, young parents who cannot wait beyond the promise that we are promising. And on top of it, with the -- I would say, the future of quick commerce and general commerce being so pervasive in today's world and today's Gen-Z audience and so on and so forth. It is very important from our future perspective as well to build our supply chain, which you can tailor to your requirements rather than being dependent on the third party. It's not like in U.S. where you have FedEx being saying this delivery or a 1-day delivery versus a 3-day delivery, you can decide as a customer for a shipper like FedEx. In India, we don't have that kind of models. So we had to take things in control. And for any large e-commerce player like us, I would say, logistics is a very, very integral part of our journey. Initially Xpressbees was built like that. But I think they moved in their own direction in terms of managing their own P&L and their own sort of a story, and likewise, for delivery, likewise Shadowfax and so on and so forth. We believe, we are in much better shape. We track metrics of performance of third party. We work with all of them still, and we work, and we are scaling our own RocketBees as well. We are far superior in terms of customer experience. As I told in my presentation a few minutes back, we have 20% superior delivery TAT compared to the third-party logistics. That itself is critical for us to be able to provide that experience, and it helps us reducing RTOs and so on and so forth, which I can talk a lot about it, but I will reserve my comments saying that it is important to build that architecture, and it's an asset-light model. It is at the same cost. Initially, there's a little bit of a bump-up, but as you scale and you build your own network in cities, you are able to have the similar cost as a third-party logistics. So it doesn't come at an incremental cost in the medium to long run. And on top of it, if you have your architecture, you can actually build an executive kind of a model, which otherwise, you cannot -- you can probably dream and wait for, I would say, performance to be done by somebody else, whereas the core if you look at any large player, everyone has their own fleet, everyone has their own model to be able to deliver that kind of a service, and it had to happen, probably it happened, now we wish -- we had not anticipated it a couple of years back, but I think it was imminent that it happened. And now we feel more confident having taken RocketBees to 28 cities, and it will continue to grow week on week, fortnight on fortnight basis. And as I said, 45% to 50% of our shipment will be done by middle of the year, which will mean a lot improved customer experience, help us in growth of the same customer who we are serving through RocketBees. And on the same architecture be able to scale up our FC Quick as well, which otherwise would have not been possible.

Just to clarify, Sachin. You talked about the supply chain issues. So what we talked about as a supply chain issue is not anywhere related to logistics. I'm just clarifying that.

Yes. Those supply chains were related to sourcing led supply chain, not the forward-looking supply chain, which is from our warehouse to end consumer.

So Sachin, I just wanted to add on to what Supam was mentioning that we continue to work with all third-party logistics, and they are critical for our business. But while RocketBees also continue to give us more flexibility towards making sure that the consumer sentiment improves and solve the micro nuances of the consumers.

Sure. Understood. Just my final question on the margin outlook for India business, if I can, right? So we have been generally trending. I mean, earlier, we were doing 80, 90 basis points expansion, then we dropped to 50, 60. This quarter, it looks like Y-o-Y, we have dropped margin. Is there any new outlook on how margin should look like on the India business? That's my last question.

So Sachin, on a medium to long run, nothing changes. I think this correction that has happened is largely because of a certain heightened competition that we saw in 1 of our categories, which is tightening. We have seen these kind of events even in earlier years. Once these are irrational, I would say, events that has happened, obviously, we don't control that because it's been done by large players. I think once it improves, that improvement will come back sharply, but we can't anticipate the time. However, our structural improvement in gross margin across our 85% of the portfolio will continue to happen quarter-on-quarter, year-on-year basis. When we increase our category mix, improve our category mix and improve our home brand mix. So that doesn't change at all. I hope that answers.

Thank you, Sachin. The next question is from Ajay Agarwal.

Supam, Gautam and team, good set of results. I have 3 questions. I will take the first one on the India business. So how are you viewing the new players that have emerged in the baby and kids vertical with whatever delivery being a proposition. There are a couple of the players, I think, in the market, especially in the metro cities that have emerged in this segment. So this is my first question. I think -- should I repeat all 3, and then you will take them or you want to take one by one?

No, we can go one by one. It helps to remain focused. So, Ajay, I think, look, your point is fair, but I can just say that we have heard about 2 small sort of venture-funded companies. Look, these are early days. There is a frenzy of quick commerce, and I think people are just riding on that bandwagon. They're operating out of it, I would say, single dark store in a few catchment of a city like -- I mean, like NCR and Bangalore. And scaling this model to a level where they attain scale, build an acquisition engine ecosystem of a certain sort of competitive game or unit economics. And on top of it, being able to build home brand, it will take them many, many number of years. And currently, their unit economics is at a CM to sort of is so terrible that it will take, in our estimate, hundreds of millions of dollars for anyone to really take certain shape and size. So in our opinion, in our assessment, it's very, very hard to replicate what has been built for players like the new players that you are mentioning in -- especially in the quick commerce baby and kid space. So good luck to them, and good luck to being able to generate hundreds of millions of dollars in investment to be able to fund their growth or -- and fixing their unit economics.

Thanks, it makes sense. The other question is on international business. So when we will be able to turn EBITDA breakeven in the international business? And by when can we expect the growth to bounce back to higher level?

So Ajay, good question, slightly longer answer. Stay with me. So again, early days. And if you've seen the last few quarter results, especially the expansion of gross margins and a certain sort of a top line growth as well as reduction in losses. I think the path that we've chosen for ourselves here for the international business is ensuring that we grow and while we grow, we are very, very focused on reducing our losses first. That's the top-most priority because we believe fundamentally that while the competition intensity is very high, we saw that last quarter also. We must remain very absolutely focused on ensuring that we are not joining that bandwagon, because retaining customers, acquiring the quality customers is the topmost priority, especially in the ecosystem, which are inducing your tax to be on the higher side or even the CPCs and CPMs can be very high. Just because of the intensity, we have to remain focused. We are ensuring that our home brand mix in the business, what we are selling, the mix of home brands is improving. The mix of brands that are higher gross margin or higher repeat categories for us is improving. While we do that, our profitability path is very clear that. We are not going to achieve a certain step function growth in top line offline or we are not going to commit to a step function growth in top line, while having a steep drop in gross margin, or steep drop in EBITDA. So the first priority is obviously improving or reducing our losses. Having said that, I think 3.5 years into KSA and about just over 5.5% in UAE. Still early days. We've seen the same friends in India. If you go back 10 years or 15 years, we've seen the horizontals play a similar sort of a business game plan, while they expand the ecosystem for e-commerce in the baby and kids category for us, and for the larger ecosystem. We ride the wave once we have our unit economics in a zone where we're very comfortable to press on the pedal to grow faster and also breakeven. So very early days to commit anything. But definitely, India, I think -- and Supam can correct me if I'm wrong, but India, I think, took about 10 years to achieve that sort of a profitability or breakeven mark. One thing we know is we'll get there faster. It will not take us 10 years.

Thanks for the detailed response. My last question will be on Globalbees. Anuj, good set of result I heard there was a mention of Flipkart impact of some growth in Q3. But can you help us to understand how much did Flipkart impact growth in Q3? And again, on Globalbees, also any plans on listing of Globalbees. Can you say that tentative time lines or any sense on the same?

Yes, sure, sure. So I would say that overall, with the readjusted model that Flipkart has, there has been an impact on the revenue level itself, and that has got depressed. Overall, our gross margin profile remains pretty consistent. And at a fundamental level, there's no material change in the margins of the core business. So really, that the impact of Flipkart, we've seen over the last couple of quarters, has stabilized. And in the coming year, I think we should be able to simply grow from there.

Ajay, the right way of looking at the Globalbees businesses, as you look at the EBITDA growth, right, which is around 150% increase year-on-year in Q3 and roughly 50% increase year-on-year in 9 months. I think that's the metric that we should see.

The next question is from Mr. Ranjit.

Am I audible?

Yes.

This is Tejash from Avendus Spark. Supam, if you can just elaborate a bit our plan with RocketBees and Quick, what exactly are we trying to solve here? And what it will entail in terms of capital commitment and bandwidth commitment in coming period?

So look, Ranjit (sic) [ Tejash ], we have spoken about RocketBees initiative for RocketBees nomenclature that you have expressed first time on this call, but I think that initiative is almost a 9-month old. We started somewhere around February, March. It's almost like 11, 12 months old now. So we have been speaking about in a couple of quarters in our earnings call. We faced a lot of challenges in late '24 and in calendar year '25, where customer experiences because of our delivery delays and painful experiences because of disruption in the last mile service provider sort of ecosystem really gave our customers a lot of pain and we waited. We tried all kind of all players, but we could not really get the kind of output, the kind of experience that we would really desire to give to our customers. And with that sort of a landscape that this will not get fixed because, as I said, India logistics do not provide differentiated service as what you will find probably in developed nations like U.S., where you can have a shipper ship your order for a priority delivery versus a regular delivery, India doesn't have as sophisticated nuance at scale and at a cost that you would like it to be. And therefore, we had no choice left, but to take this last mile service sort of a game in our hand. We built a totally an asset-light model. Total tech stack is being built by FirstCry. And on that, we have third-party logistics, regional local players who are providing dedicated manpower who were attached to fulfilling those shipments or delivering those shipments to the last mile, dedicatedly only our shipment, not mixing shipment with some other shipper. So with that, we have not only improved, I would say, the delivery tag by around 20% compared to the third-party logistics provider for our end customer. But also improved a lot of other metrics in terms of RTOs, in terms of other metrics that come around damages and so on and so forth, which essentially means superior sort of a customer retention and superior customer cohort. As more and more customers come under the area under the curve of RB, we believe that we will have -- we will be able to improve our growth with higher retention and higher LTV from those sort of a customer. So it will pan out very beautifully for us. Also, I must say in the same breath that it doesn't cost much extra compared to the third-party LSPs cost. Initially, for a few months, it is a bump-up, but after that, once the city stabilizes onto a higher network of RB delivers, the cost really comes down to the same third-party logistics service provider costs. So it is something that I wish -- we would have not faced this issue in the first place. But since we faced it, we had to build it. And having built it, we -- there was also a strategic product and understanding the under current of last couple of years that a couple of quarters, we're seeing how e-commerce has been rapidly changing the consumer behavior of getting products much faster. With RocketBees sort of an architecture, we are able to now control our destiny or control our customer experience for FC Quick as a model as well. Otherwise, it becomes super difficult to just keep waiting for third-party LSP to really build a model for you and being able to scale up as quickly as you would wish to that would have not happened. So it's just taking things in our control. The way we did it in 2013, when we started Xpressbees. We had to take that in because at that time, there were no LSPs, other than DTDC and Blue Dart and so on and so forth. Historically, I don't want to go there and tell you the whole sort of the story, you may already know that. So we had to build what we build at that point in time. But we had to do another innovation again once again because of the disruption in the LSP ecosystem in the last couple of years, and therefore, ended up building our own RocketBees dedicatedly only working for FirstCry. So I hope I have answered this question unless you have any specific questions on this particular point.

Supam, this was quite comprehensive. Just one follow-up there. So when we look at a player like Nykaa, now 2 years back, they also called out that because of logistic issues and other challenges, they are not able to give the customer experience was getting compromised. And especially, they were getting into Nykaa also, so they wanted it to be much more premium. Now they are addressed by investing in fulfillment centers closer to larger markets. And as the result, shows now, they seem to have solved the problem and in a very good way. So just wanted to know this stencil that we are trying to use or we are using now we have committed to, has it been used? And hence, it gives us confidence or we are the first to try it, because to our naked eyes Nykaa model also seems to be doing fine, which also had -- similar challenges as we had?

So I'll just tell you the broad difference between us and some other players that you are mentioning. Look, we are very horizontal in some sense. We are shipping from a 10-gram diaper pin to a 30-kilogram toy car. So our supply chain, our logistics model is far, far different than 0.5 kg of a shipment of a typical sort of a fashion or a beauty BPC as a product category. So the supply chain is far, far different, right, from storage to a line haul, mid-mile, first mile and last mile. So I think it is very, very complex. So it cannot be compared with what you are mentioning in real terms. So, therefore, while things may work out with others in a different way, same paint brush cannot be applied onto our kind of many horizontal product mix where the spectrum of the product in physical farm or a volumetric farm is far different than what the others are providing. So we had to take -- we had to build what we therefore build and as you will remember, when we have already 85 warehouses somewhere around 83 or 85 warehouses in the -- from a proximity standpoint, already that network, we built it a fairly long period of time back. In fact, we were the pioneers of building sort of a dark store when the dark store model as a name nomenclature did not exist. We built our first so-called today's dark store in 2013 or 2013, '13 or '14, somewhere around that. So we have been fairly innovative in those terms. We enjoyed the fruits of that journey fairly early in our overall 15-year journey, but I think things change, environment change, service models change, consumer expectations change, and we have to reinnovate, reinvent ourselves, and that is where it led to building what we have built now. This will be long-lasting. This will be a very strong pillar of our growth going forward. In fact, in the cities that we are already delivering through RB, we see a very significantly higher growth than the cities that we do not have RB today. I hope that really gives you -- and is significantly different. So therefore, that gives us internal sort of a boost as well that what we're doing is right, not just vanity metric in terms of customer satisfaction, but also in terms of real growth that we'll be able to demonstrate once more and more customer experiences RB and the RB network increases to many more cities and we'll be able to demonstrate India multichannel growth our online growth into a very different curve in FY '27. We have mentioned that in our presentation. And hopefully, we'll continue to demonstrate sequentially, not just FY '27, but sequentially a superior growth in our India multichannel. We are super confident on that. On back of these initiatives, in fact.

I mean, this is a long-term investment. It is a long-term benefit that we are building for the consumers. So it is important from that window as well for us.

Perfect. And just for last, if I may squeeze in a follow-up there. What percentage of our revenue or client pool or customer pool will be able to service with this initiative by, let's say, in next 2 quarters and by the end of FY '27. And you have said that witnessing 20% improvement in that wherever we have done -- implemented this. So other than that, this customer experience was up in which KPI and how we should think of it translating into financials going ahead? That's all from my side.

So as I alluded, I think we are witnessing significant superior growth. So if you are talking about 8.9% or maybe 11% if you want to iron out the supply chain deficiencies that we witnessed in quarter 3, you can apply definitely a much superior growth than that. We have in cities that where we have RB, we're talking about mid-teens plus growth. So as we expand our RocketBees network to more and more cities, we wish we would be able to expand that mid-to-late teens growth model in those cities as more and more customers really get area under the curve. So as I said, RocketBees by middle of the current calendar year, we should be able to touch 45% to 50% of our overall shipments.

Next question is from Vineet.

So just a follow-up on FC Quick. I get your point around the third-party logistics. But how would you -- few commerce players as our competition who are delivering within, say, like 10 to 15 minutes. And what will be our value proposition if we are -- if our delivery promises 2 to 3 years, so is it going to be the assortment depth or it will be largely pricing-led?

So Vineet, if you think -- let's go back into the shoes of the mom. Typically, our AUPT is fairly high compared to quick commerce, and mother typically would put multiple number of units in a typical order, number one. Number two, our assortment itself, we are talking about not just diapering our consumables, we are talking about entire fashion, footwear and baby gear, nursery, toys, the entire product categories that we serve in a regular business is also being served in the FC Quick. So it's a very different experience, and we are leveraging 12 -- today, we are leveraging on a pilot in these 3 cities on few pin codes across our COCO stores, through our COCO stores and through our current sort of warehouse. Over a period of time, we will be leveraging close to around 1,200 or COCO stores as we progress further. And that will give us an extremely high operating leverage and as well as in certain pin codes, we'll also be able to increase coverage of the dark stores as well. So over a period of time, we believe that while 10 minutes is what we are not solving for the young mother, who is probably looking for a single item, we are not catering to that. And as we have talked about, there is not so much of an overlap between what Quick commerce assortment is and what our assortment is. We're talking about a full assortment. In -- just to give you an example, nonfashion assortment itself, we have 300,000 SKUs just in nonfashion assortment. So it's a very large assortment that we are talking about. And with that, we believe it's -- the objective here is not to solve for 10 minutes or half an hour. It is to solve all that customer experience where they have a certainty that will come in a few hours with the full basket that they have ordered for. That is what we want to give assurance rather than -- and to catch on to that customer experience is what we want to solve for. And that will remain the bulk of the customer experience that young mothers or young fathers would want to solve for. And look, majority of the products that we sell is our home brands that we have already acknowledged in the past. So that is not available anywhere. And in particular, babies and kids space, there is a challenge on size and scale of brands, third-party brands that are available. That essentially means that customer would come back, would shop with us and will shop more and more with us provided he gets a certainty on our quality of delivery experience through FC Quick, we'll raise the bar. That's the objective that with which, and we have already had, I would say, a few weeks of FC Quick already live. Of course, you can try it in few these 3 cities and some pin codes and the experience or the pilot -- our results have been I would say, very superb for us. We're just ironing out the tech product and the overall supply chain, overall efficiency, and we'll continue to scale this up. Like we are giving you RB update, we hope to give you the FC Quick update over the next few quarters as we go along. So we remain super excited on these 3 initiatives that we have talked about today.

Perfect. So I have slightly structural question over our growth. While I appreciate our focus on profitability, but towards, say, like last 4 to 6 quarters, our India multichannel growth has moderated significantly versus our own historical growth, say, like prelisting. And we've also alluded to say sort of weaker consumer sentiments. But other multichannel platforms in Nykaa has grown significantly faster while expanding margins. So structurally, beyond FC Quick, what are the other levers that we are working on to reaccelerate growth back to, say, like mid-teens or higher?

I think with these initiatives itself, look, there are always many projects and many initiatives that we undertake in our regular day-to-day, and which we have not spoken about. But these were 3 large worth mentioning initiatives that we spoke about, which will really move the needle. We remain super confident about our mid- to long-term story of being able to deliver mid- to late-teens growth, or our India multichannel. So we remain committed to that. In last 3 quarters itself, if you -- in my first slide itself, I think we talked about the growth increasing quarter-on-quarter, year-on-year basis and sequentially for last 3 quarters. And you will continuously see that happening over the next few quarters. And I think structurally, with these 3 initiatives, we are destined to be able to see that and deliver that without any compromise. We don't see any challenge. We have to just execute on these initiatives hard day in, day out and ensure that we are retaining and delivering those results that you're all anticipating. So I think it should happen sooner than later. FY '27 will be far superior than FY '26. And I didn't mean to say back-ended. I mean, sequentially quarter-on-quarter, you should be able to see a continuous increasing growth year-on-year.

In the interest of time, we will just take one last question. Arvind please unmute yourself?

So like given the unique lifestyle of baby and kids product, how we are working to extend our customer engagement beyond early childhood and maximize lifetime value?

So Arvind, we have a couple of initiatives, a couple of things that we have talked about a few times, and maybe it's in the supplementary slides as well. We cater to products from minus 9 months when the mother is pregnant. Even prior to that, we engaged with the mother through our parenting platform, which is part of our First Cry app. From that time, once -- before the mother conceives a child from that time itself, we have the product range up to 12 years of the age of the child. So many years back, we had started the journey from minus 9 months to 3 years. Then we extended it to 6 years, and then later extended from 6 years to 12 years. So -- and we have compartmentalized our app, if you look at our front end, a 3-year old mother or a 6-month old -- I mean, 3-year old, young one mother or a 6-month young ones mother or a 6-year old kids mother will see a very different homepage as they progress -- as their kids progress over age over time, even based on the gender also, it's very personalized. So it's a hyper-personalized, from both gender and age and be able to show the relevancy of the products and being able to, therefore, retain the lifetime value of the customer from almost up to a 15, 16-year because there are almost 1.5 kids family, and therefore, a couple of years of gap, 2 or 3 years of gap in between first and second child. Between almost 15 to 16 years of a lifetime value is what we are able to sort of map with driving engagement through the product journey that we have been able to build. Initially here, the engagement is from parenting platform, which is a far superior engagement. But over a period of time, it is more, I would say, to the products and the superiority of products and our home brand play and a curated play through a partnership with thousands of brands is how we are able to retain those customers and super their customer experience. So that's how we have been able to manage and intend to grow the lifetime value and the cohort and frequency of customers.

In fact, in the supplementary side, there is a side on the revenue cohorts as well. You can refer to that slide in the presentation we have shared with the stock exchange. That was the last question. I'll just hand it over back to the management for any concluding remarks.

Nothing, Anish. Thank you, everyone. Thank you for your time. We promised we continue to deliver on what we have mentioned here. So you'll continue to see an improvement in our India multichannel growth and overall growth in the consolidated business. Looking forward to seeing you in the next quarterly update. Thank you once again.

Thank you so much. Thank you. Thank you so much, everyone.

Thank you.