Brainbees Solutions Ltd (NSE: FIRSTCRY) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Anish Arora — Head of Investor Relations
Supam Maheshwari — Managing Director & Chief Executive Officer
Gautam Sharma — Group Chief Financial Officer
Vivek Goel — Chief Business Officer
Abhinav Sharma — Country Head, Middle East
Anuj Jain — Chief Business Officer, FirstCry.com
Analysts:
Unidentified Participant
Sachin Dixit — Analyst
Sachin Salgaonkar — Analyst
Videesha Sheth — Analyst
Garima Mishra — Analyst
Tejash Shah — Analyst
Sucrit Patil — Analyst
Presentation:
Anish Arora — Head of Investor Relations
Good evening everyone. Welcome to Brainbee Solutions Limited Q1FY26 earnings call. This is Anish Aroda and I have with me Mr. Supam Maheshwari, Managing Director and CEO of the company, Mr. Gautam Sharma Group Chief Financial Officer Mr. Vivek Goyal, Chief Business Officer of the company, Mr. Abhinav Sharma, Country Head of Middle east business operations and Mr. Anuj Jain, CEO GlobalVis. 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 to such recording, distribution and publication.
All participants have been muted as for the default mode and participants will be unmuted once we open the Q and A forum for the members to ask questions after the presentation from the management concludes. We’ll be covering the presentation in the beginning of the call and will thereafter open for the Q and 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 hand over to Mr. Supam Maheshwari.
Supam Maheshwari — Managing Director & Chief Executive Officer
Thank you Anish. Good evening friends. Welcome to our Q1 FY26 performance update meeting. Yeah so we are very happy to report 25% growth in our adjusted EBITDA for the Consol business for the first quarter Visa Vista at Q1FY25 and also at a console level. First time we have become free cash flow positive at a console business level. Growth in Quarter in Q1 in India multi channel has been moderate, has got moderated on account of several factors broadly broad slowdown in consumer you know sector consumption side and macro factors including you know changes in the last mile delivery ecosystem which also impacted our performance in the Q1 and a bit of an elevated geopolitical tension in North India.
All of these have led to a little slower growth than what we had anticipated and however we see encouraging signs. In the month of July we have observed an early teens growth over July or the previous July. Overall our India multi channel business continued to be PBT and free cash flow positive in Q1FY26. International business continue to deliver. As you know we have discussed in our few previous calls we have been able to deliver sustainable growth with a improvement of 30% year on year and adjusted EBITDA that you’ll see in the subsequent slides and we will continue our path on this sustainable growth for the international business and reducing our burn materially and on the global base front we deliver another strong quarter of organic growth and and with core categories driving the significant momentum close to around 40%.
So, I hand over now more detailed discussions and updates to Gautam.
Gautam Sharma — Group Chief Financial Officer
Thanks. So this is the performance summary for the Consol business. The revenue in Q1 FY26 has grown by 13% year on year to reach 18626 million revenue gross margin we continue to improve the the gross margin. The Gross margin expanded by 82 bits. It’s a absolute increase of 15% year on year. Adjusted EBITDA which Supam talked about in the previous slide it has increased by 25% in absolute terms on year on year. And if I talk about the percentage of adjusted EBITDA to revenue it’s it’s 5% over 4 and a half percent in Q1 FY25 cash profit after tax which is the net profit, the net accounting profit after adjustments of the non cash items IT has increased by 197% over Q1 FY25.
The next slide we will talk about some of the KPIs. The console KPIs annual unique transacting customers this is for trading 12 months is 10.8 million which is an increase of 14% over June last year. Similarly GMV for the console business which is the India multi channel business and the Middle east business IT has grown by 9% over Q1 FY25. The next two pointers we have talked about in the previous slide that is the revenue from operations on a console basis as well as the adjusted ebitda. India Multi channel Adjusted EBITDA which is the core business, it has delivered A growth of 12% over Q1 FY25 largely driven by expansion in loss margins. We will talk about in detail for the India multichannel business in the coming slides. Cash profit after tax we talked about in the previous slide it’s an increase of 197% over Q1 FY25.
Now I will hand it over to Vivek to take you through the performance of the India multi- channel business.
Vivek Goel — Chief Business Officer
Thank you Gautam. So as Supam mentioned in his opening remarks that Q1 this year was a bit of a it had multiple moving parts for us. While the broad based consumer slowdown which we mentioned in our previous calls continued, we also faced challenges in our last mile delivery ecosystem which actually impacted the consumer experience in our online business.
Q1 also witnessed close to a weak sale in northern states getting impacted due to the India Pakistan conflict. We also saw a unusually soft and softened summer which caused which was caused by the early onset of monsoons which further impacted our performance in offline growth was also impacted by the store closures that we did in Q3 last year as some of the as the sales remain in the base of Q1 last year for the for the same stores. However, as super mentioned that we have witnessed some very encouraging signs of growth in July. I want to reiterate that while some of these things have impacted our growth in Q1, we have successfully navigated such challenges in past and we will surely do so in the coming quarters.
In terms of numbers, our annual unique transacting customers in India Multi channel business has increased by 14% to 10.3 million. Orders grew by about 6% to 9.5 million. Our GMV growth was 10% at 21,265 million. Anish, if we can move to the next slide. The revenue for India Multi channel business grew by to 12,366 million. Our adjusted EBITDA grew by 12% for India multi channel to 1067 billion.
Gautam Sharma — Group Chief Financial Officer
So just to add here, we continue to expand our gross margins. You can see the numbers highlighted in green. Gross margin of 36.6% in Q1FY25 has increased to 37.8% in Q1FY26.
Okay, I’ll hand it over to Abina for the Middle east presentation.
Abhinav Sharma — Country Head, Middle East
Good evening everyone and thanks for joining us over the call this evening. We’ll just go over the quick, quickly go over the international business segment. We are seeing continuous growth across all key matrices, the levers in play. You know we have outlined this in our previous calls that sustainable growth is of prime importance and focus for us in this region for both UAE and ksa. And we’ve been continuously executing our plans to achieve that kind of growth by essentially optimizing the top line mix which thereby yields a superior GMV to revenue conversion which you will see in the subsequent slides and and also superior margins and also ensuring that our quality of acquisitions are very very high or very very superior because this in turn adds to our overall sustainability sort of idea and vision going forward.
So we saw a 14% increase in AUTC in Q1FY26 over Q1FY25.7% increase in orders the same time period and GMV grew by 3% in the same time period. However we saw a 13% increase in revenue. And we’ve mentioned before that for the international business revenue is a more apt number versus a GMV. So we grew from 183 crores to about 207 crores. Gross margin expansion was about 100bps. More importantly, going to the sustainable again maintaining an equilibrium between growth as well as burn reduction are adjusted EBITDA improved both in terms of absolute as well as percentage points. Absolute reduction of 30% from 30 crores to about 21.5 crores and percentage reduction by 700bps.
Anuj, over to you for Global Bees please.
Anuj Jain — Chief Business Officer, FirstCry.com
Thanks. Thanks a lot Abhinav. Good evening everyone. On the Global Bees front, we’re very happy to report a 31% year on year growth from 324.5 crores in Quarter 1 FY25 to 426.5 crores in Quarter 1FY26. The adjusted EBITDA as a percentage of revenue was 1% in this quarter. Our growth has been completely organic. The last acquisition that the company made was in September 2022. Global Bees operates in the core categories of home improvement and utilities, home appliances, health and personal care and active lifestyle and accessories.
These core categories contribute around 95% to our business. If we slice the numbers, revenue from co categories increased by 40% plus year on year. And these categories delivered an adjusted brand EBITDA post corporate expenses of 4.5% plus in Q1 FY26. As mentioned on the previous call, we continue to rationalize the brand portfolio across other brands. Therefore, the margins will be weighed down due to that for a few more quarters this year. However, this rationalization will be complete in this financial year itself.
Gautam, over to you.
Gautam Sharma — Group Chief Financial Officer
Thanks Abrij. So this is a repetition of what we talked about in the first few slides.
A summary of the console performance. Revenue grew by 13% margin expansion by 80bps and the EBITDA expansion by 50bps. An absolute increase of 25% year on year. This is where we end our presentation.
Supam Maheshwari — Managing Director & Chief Executive Officer
Happy to take more questions. Yes.
Questions and Answers:
Anish Arora
Thank you team. We can wait for a few minutes for the queue to get formed and then we can start with the Q A. I request participants to raise the hand for asking questions. We’ll unmute you one by one and you will have access to the mic. Please introduce yourself and the name of the organization you represent.
The participants are also requested to limit their questions to a maximum of 2. For any follow up questions, you may join the queue again. First question is from Mr. Sachin Dixit. Sachin, please unmute yourself.
Sachin Dixit
This is Sachin Dixit from JM Financial. I Had a couple of questions. So my first question was on India multi channel business where obviously growth continues to get worse and the question largely is what can we do as a company to drive growth out there, right. Because the weather related impact, right. Late winter was there, then early into winter, now early into summer.
Right. So these things will keep on happening. But what as a company we are pushing to drive growth, right. Because until now our online growth used to be good. But if I am calculating the numbers correctly, even online growth seems to have dipped to like 11 and a half 12% this quarter.
Supam Maheshwari
So I think Sachin, if you look at, I understand where you’re coming from and it’s a very fair question. Some of these things external event may continue to happen, it’s not in our control. We need to focus on what is in our control and that’s I think what we are sort of working towards.
Part of it is visible and part of it will probably we’ll be able to continue to demonstrate. So first factual information is the July over July performance has been in India multi channel has been in early teens in terms of growth. So I think we are back on a quite a good sort of a shape and we strongly believe that we should continue to deliver similar trajectory for the rest of the year as well. Having said this, what are the factors that will help us that we are actually working towards? One of the most important things that we are working towards is building our, you know the, the impact that has been on us is from a last mile customer experience perspective and I can talk about both online and then specifically on offline as well.
So in the online the impact has been largely because of the customer experience and there have been consolidation in our sort of a last mile logistics of service network in the ecosystem of that we all know that and that has shrunk some of the capabilities. But at the same time there has been a lot of demand that has been generated out of some of the players which essentially lead to a demand supply gap leading to supply being constrained and leading to industry average going down in terms of delivery performances which we believe we need to work upon.
And as you would remember we had started an experiment a couple of months back. We talked about in the last quarter, happy to report that we have expanded that experiment to now four cities and we will continue to expand that to many more cities over a period of next few months. And there we have seen the results of a much superior growth year on year basis in those cities where our tech platform and our local regional logistics partners are able to deliver a much superior customer experience and able to have that growth pack. So we believe over a period of next few quarters we will continue to work on it.
Probably it will never finish. That work will never finish. But it’s something that we want to really expand aggressively to control that customer experience and being able to get the growth back. This is one thing that we are doing from an online perspective. Rest are things from an online perspective. We continue to depend on some external factors like you know, environment, environmental factors that unfortunately we can’t control from an offline perspective, yes, you know there have been unseasonal rains do impact offline stores. But we believe that, you know, and, and stores that we had closed in Q3, which Vivek talked about were there in the base of Q1.
Hopefully once that base is gone then I think you should be able to see superior growth and some of the store size talking discussions that we have done last time around will help us in improving our capital efficiency. So I think those are the ways that we are addressing the broad consumer slowdown, especially in the offline. But we are very confident that what we have seen in July will continue to be able to leave for the rest of the months in the fiscal year 526.
Sachin Dixit
You know, just a quick follow up on that. Are you happy with the speed of store expansion, offline store expansion that you are doing in COCO format?
Supam Maheshwari
See look, it’s. You know, I think we have put ourselves in a constrained way to be able to deliver that. We have optimized that. You know, I wouldn’t say that what we had we will add in FY26 close to around 9200 stores. What we added in FY25 as well. So that is what we will be delivering for FY26 as well.
Gautam Sharma
So the focus Sachin is to better the capital efficiency of the offline business.
Sachin Dixit
Right, Got it. Sure. My second question is on Global Vs, which is a business which continues to surprise positively have we got so on that piece? I mean two minor questions. The first one is do you plan to start acquiring brands anytime soon there? And secondly as first cry investors, can they anticipate any liquidity from that business getting demerged, having its own IP or anything like that? Those were my two questions. Thank you.
Supam Maheshwari
Anu, you want to take that or you want me to take that? I think the second question. So second question we’ll take because let’s let.
Anuj Jain
Yeah, sorry, I was just.
Supam Maheshwari
Go ahead with the first question. At least let’s answer the first question. On the acquisition bit.
Anuj Jain
Yeah. So on the first question I think, I think we have it in our core categories. We already have quite a few categories and I think we have a very good spread of play to be able to grow. And it is, it is very important for us to prioritize consolidation and financial prudence for us to be able to sort of continue to grow with this kind of a margin profile. Therefore, acquisitions are not something that are on the cards or you know, under consideration right now. On the second part, I’ll let Supam take it.
Supam Maheshwari
Just to add, just to add here, you know Sachin, the last equation we made was in September 2022. So whatever growth we are delivering since last couple of quarters is all organic growth.
Sachin Dixit
Completely.
Supam Maheshwari
Yeah. Exit. So. So on the second question, Sachin, from an exit path perspective from a monetization for the shareholders of Global Beast company will look company has a, you know, it’s a separate management team which is run separately and also it has its board, separate board and also it has a separate set of investors as well apart from Brainbees as well which include Prem G, Lightspeed, Chiragna and so on so forth. Having said this, probable, most probable outcome for Global Bees as an outcome will be a listing which company and its shareholders will decide over a period of time is when Brain Bees also will find a monetization opportunity over a period of a few years.
Sachin Dixit
Fair enough. Thank you and all the best.
operator
Thank you Sachin. The next question is from Sachin Salgaonkar. Sachin, please unmute yourself.
Sachin Salgaonkar
Good day management. A couple of questions from me. One on the core multi channel business and one on international on the core multi channel business. Two parts to the question. One, are we seeing impact of quick commerce on the business? And the question is because you know you guys are experimenting with this faster delivery in four cities and clearly you are seeing traction. So I guess there is appetite for customers to get products at a much faster pace out there.
The second part of this question is clearly there were three factors which impacted the growth this quarter. Consumption slowdown, last mile challenges and what we saw in terms of a geopolitical issue. Now the geopolitical issue is behind and generally wanted to understand. Supam and Gautam, your thoughts on consumption slowdown, last mile challenges. These have been there for a quarter or so. So what’s the kind of a steady state growth we should expect going ahead at least for a few quarters before these things normalize? And just to call out my second question, wanted to understand again the steady state GMV growth for international business.
We did see a 3% growth this quarter. How should one think about steady state growth and what are some of the things we should see from first clarity to reach to that level?
Supam Maheshwari
Sure. Abhinav, you want to take the second question first and then we can come to the first one.
Abhinav Sharma
Yeah, yeah. So before I answer that question, I missed an update, a very important one for everybody. So very happy to announce that in the Middle east we’ll be setting up our first store and operating our first store out of Riyadh in Saudi Arabia, well within the timelines of this quarter before the end of this quarter will be live.
So this is our first step, baby step while we go towards our omnichannel play and, and a great testament again to the India playbook that we’ve evolved and developed over the last decade and a half. So yeah, so Sachin, on the, so first off on the gmv, you know, I would like to mention that, you know, for the international business, I think the right sort of a number to look at is a revenue growth, not GME growth. So in terms of your question on the sustained growth or a steady state model, I think too early right now because the reason why I’m saying this is because KSA is just three years old in the market in terms of business and UAE is about 5.
So we are still early days. However, when it comes to growth, we are very clear on our focus of having a sustained model of top line growth. And when I say sustained, I mean maintaining an equilibrium between generating top line which is also helping us at the same time reducing burn because that’s what we mentioned over the last few calls. And you’ve seen that in the, in the second slide where we’ve reduced the burn in absolute terms over 30% or so. So while we do this, we are very, very clear on acquiring customers that are having a very high or a superior quality in terms of retention and thereby a longer sort of LTV for us generating or helping us expand our gross margins as well as, you know, strengthening our moats while we do this.
You know, this journey is I would say in its infancy right now. So we, we need to give it some, some bit of time and, but, but the light at the end of the tunnel is very clear. You’ve seen that the cost or the, or the, or the losses are cut a quarter on quarter and you would see that progressively here on, from here on and you will see growth coming as well on the back of both our home brand share, improving the acceptability of our home brands in both markets, UE and ksa while we improve the product assortment, product quality and we sort of acquire and retain our customers, fending off any headwinds that we see continuously with heavy or deep discounting and you know, very robust or aggressive postures on marketing spends in the ecosystem. So our first sort of focus is unit economics improvement and then from there on, while we do that, from there on we then double down on our growth and marketing spends. That gives us the, you know, sort of an open playing field to expand and to grow sustainably.
Sachin Salgaonkar
And sorry Abhinav, what kind of steady state growth are we talking? India businesses early to mid teens. Is that something similar as a growth? We should look at the international business?
Abhinav Sharma
In the foreseeable future? I think yes, because that would be more sort of a sustained number. But like I said, once we achieve a unit economics that is helping us, you know, allowing us to double down on our marketing spends, we can then, you know, achieve certain higher growth numbers as well.
Sachin Salgaonkar
Got it. And foreseeable future is one to two years I presume. Right.
Abhinav Sharma
I would say the next couple of quarters for sure.
Sachin Dixit
Okay, got it. Thanks.
Supam Maheshwari
Yes. So coming back to the first question. Yeah. There are certain factors that are, we talked about those factors leading to the kind of growth and, and I think look, we are putting our efforts as, you know, Sachin Dixit asked that question and I think July is a testimony of that. So somewhere some efforts are being put by government policies, some efforts are being put by, you know, sort of our own efforts in terms of improving the customer experience and the, and the planning that is underway and some are external factors that you know, have some, you know, should be helping us during the course of our journey should not surprise us negatively with all of those.
I think July has been a month that looks give us the confidence that clearly we should be in, you know, as as I mentioned it was in early teens for us. July or July we believe for the rest of the sort of a fiscal year we should be able to demonstrate or we should be able to deliver the similar kind of a growth for the India multi channel business. While our focus on our effort will remain what we can influence which is delivery experience and a bit of, you know, rest of the stuff. There are, there are so many finer points that we don’t want to get into that those are related to, you know, you know, tech, merchandise and a lot of list of activities that we will end up doing as a management team. However, the key focus area will remain delivery experience and and, and I, I, we hope we continue strongly believe that we should be able to demonstrate what we saw in July.
Sachin Salgaonkar
And so for many thoughts on Quick Commerce, is that impacting business or not so much?
Supam Maheshwari
Nothing has changed, Sachin, is what we have mentioned in the last quarter update or last couple of quarters updates. Nothing materially has changed for us from a Quick Commerce sort of a perspective. Cool.
Vivek Goel
So certain the overlap at the category and the brand level is quite small. So that’s what. And that has not changed per se from a Quick Commerce point of view. And as Supam said, the core focus remains on customer experience improvement and the delivery experience improvement which had actually suffered in the previous quarter.
Sachin Salgaonkar
Got it. And Supam, just a clarification. When you talk about early teens growth, are we referring to GMB growth or revenue growth?
Supam Maheshwari
Do we mean revenue?
Sachin Salgaonkar
Okay. All right. All right. Thank you.
Anish Arora
Thank you, Sachin. The next question is from Vidisha. Vidisha, please unmute yourself.
Videesha Sheth
Yes, hi. Thank you. Some of my questions have been answered. Just one more from my end. In the ppt, the positive cash flow which you’re referring to would also be a function of relatively slower network expansion, right? So once that picks up, do you expect cash flow to return to the negative terrain as company would want to focus more on growth or customer acquisition?
Supam Maheshwari
Sorry, Vidisha, we could not hear your question properly.
Videesha Sheth
Is, is my, is my voice better? I mean, is it more order?
Supam Maheshwari
Can you please repeat your question?
Videesha Sheth
Yeah, sure, sure. So my question was pertaining to the cash flow in the deck. It’s mentioned that at console level, cash flow has been free, cash flow has been positive. But what I wanted to understand was that that would also be a function of relatively slower network expansion or relatively slower store expansion as well. Right? So once the store expansion momentum picks up, or do you expect the cash flow to return to the negative terrain as the focus would be more on growth and customer acquisition.
Gautam Sharma
So. So in fact, Vidisha super mentioned that, you know, we plan to open similar number of stores in FY26, you know, which we have opened in FY25 last year. And it doesn’t, you know, create a significant difference, especially on the capex print, you know, even if we slowed down a bit, you know, in terms of opening up the number of stores, you see the, the cash generated from operations even after working capital, you know, you know, that’s very busy.
Videesha Sheth
Okay, got it. Yes.
Anish Arora
Thank you. Vidisha. The next question is from Garima Mishra. Garima, please unmute yourself.
Garima Mishra
Hi. Thank you for the opportunity first question is on the India this quarter you posted EBITDA margin expansion of 30 basis points. Could you highlight to us the levers available in this business to further increase these margins? And do you think the current pace of margin expansion is somewhat constrained because revenue growth has been under pressure?
Supam Maheshwari
So encouraging sign is I would say a gross margin expansion. If you see gross margin for the India multi channel business is continuously improving even in Q1 FY26 over previous year QFY25 we have improved the gross volume by almost 120 basis point.
We could not get the same benefit in the emita margins largely because of two reasons. One is because of the constraint in the offline growth we got a deleverage on the fixed cost and plus you know the experiments we are doing to improve the last mile delivery experience for the online business and the mix between the online and the offline has slightly changed because the online business tends to have more logistics costs compared to the offline business that cost has also increased and that’s the reason the EBITDA margin expansion has reduced by almost 90 basis points.
So what I would say is the healthy thing to see is the gross margin expansion which is continuously improving and once you know we see a positive movement, you know in the industry growth I think which this deleverage in the fixed cost should should start reversing. We believe that the increase in the direct cost largely coming out of the logistic cost is also temporary and in a longer run should give us positive results. So I think what we should see as a health of you know margin expansion is, is the gross margin expansion very much.
Garima Mishra
Okay, understood. Now again sticking to the India business only your caps in the business have traditionally been very low, right? Do you think you need to spend more towards customer acquisition or maybe even retention to sort of drive up GMV etc any other growth driver really.
Supam Maheshwari
So Garima, see in the India multi channel business we have a very clear focus and a direction on the unit economics we are working on. Right? And that focus continues. What we believe is as some of these factors in terms of consumer experience and broad based industry growth factors start turning around we should be able to double down because there’s a, there’s a incremental benefit that we can get out of it. So primarily it’s one of the we are currently on the path that we have defined for ourselves and I think we are going to maintain on that direction.
Vivek Goel
So garment just to sort of add on this, I would say that look gross margin and our growth or let’s say our, you know, these are two independent, I would say objectives or independent paths. They’re not interrelated in that sense because we will continue to see a gross margin improvement because of, you know, several reasons we have talked about in our previous calls and those are structural plays that will continue to help us to generate more gross margin.
While our business is slightly different than other sort of businesses in the online space in terms of spending more to generate, you know, I would say customer acquisitions and cohorts and so on and so forth. We are at a. It is, it is more of we need to fix certain bit of a delivery experience to be able to ensure we are on track from a new customer acquisition window as you’re seeing in AUTC as well. But at the same time once overall consumer slowdown also changes and our delivery experiences also improves, I think some of those things will actually start seeing in the yield that comes out of from the marketing spend that we do.
Otherwise it will not be as productive as we would wish to be. So we are on track. Hopefully next couple of months and quarters we’ll be able to improve what we want to control. And once that happens, I think our similar marketing expense will deliver a lot more superior result. And you will see the benefit of what Gautam also talked about the, the benefit of gross margin expansion yielding to the higher EBITDA expansion as well.
Supam Maheshwari
Remember the slides you know which we have presented during the last call, you know that was on largely on cohort, you know the cohort is continuously improving, you know, year on year. So we talked about code for the four different periods. So you can see, you know that’s the power of the omnichannel with the multi channel business. The code is continuously improving.
Garima Mishra
Understood what it maybe, maybe you know last one from me if I may. Is there any SSSG number that you can share for the India offline piece?
Abhinav Sharma
On that, I would, you know it will be difficult as we have already explained you that you know our model is you know from a not a traditional retail model at a catchment level or at a city level is what we should look at. We are, we have spoken at length in previous calls as well that the model is you know, offline. Our store model generates similar kind of contribution margin. There’s no material difference post marketing, post rent between the two online and offline and that is what gives us the encouragement to continue to expand at a wallet share basis in that catchment for those customers including our increasing our market share. That is what we look at. We want to focus on rather than pure SSG because that may not yield us the right, you know outcome for us as a team. So that’s how we, that’s how we are maintaining and that’s how we will continue to maintain going forward. Our capital allocation, our focus on the mix of the online and offline to meet those objectives of wallet share, converting those footfall into gaining more wallet share with the the customers going both online and offline or offline and online both ways.
Supam Maheshwari
And in fact we’ll I’ll again take you to the you know last part of presentation wherein we talked about the cross pollination, you know so 38% of the customers they transact both online and offline. That was a 525 data.
Abhinav Sharma
For the top 20 cities.
Supam Maheshwari
Yeah, for the top 20 cities.
Garima Mishra
All right, understood. Thank you so much.
operator
Thanks very much. Next question is from Tejas Shah. Tejas, please unmute yourself and ask the question.
Tejash Shah
Hello?
Supam Maheshwari
Yes we can hear you.
Tejash Shah
Yeah hi, thanks for the opportunity. So I joined in a bit late so apology if this question has been asked earlier but India multi channel margin just 33 basis point expansion. Yoy I believe that this particular aspect of the business was irrespective of revenue growth because we were working very diligently and in calibrated way on private label or sorry your home brands expansion. So just wanted to know is this quarter in aberration and we can see acceleration in this going forward in the year or, or there are any more factors which are putting pressure over here.
Supam Maheshwari
So we did cover this particular point. Happy to sort of repeat it as well. Look we delivered 120bps increase in our gross margin in India multi channel although only 30 bips got translated into a beta. The loss of 90 bips happened on account of largely, you know, a few factors but largely we would want to call out two factors. One is some of the experiments that we are doing on the last mile improving delivery experience and plus some deleverage that has happened in the offline, you know stores business because of the growth I think over a period of next few quarters as what you see in July the growth is back in early teens for the entire India multi channel business which will help us to reverse the deleverage and also the experiments that we are doing on an online sort of a logistics it is a temporary phenomena. Over a period of time we will be able to as we build volumes we’ll be able to bring that back into normalized sort of a direct cost and thereby we’ll be able to Translate a large significant part of our gross margin expansion to the EBIT and gross margin. Gross margin expansion will continue to happen over a period of time because that’s quite structural in our framework.
Tejash Shah
Clear. Second, when I scan the broader retail universe, what has happened is that there was a phase of bunched up demand post Covid and a lot of players responded to that by expanding retail footprint. And now for last one and a half year we are seeing that there’s a lot of consolidation of demand in terms of footprint happening across and just in line to in tune with the demand scenario. So just wanted to know, we also had a very phenomenal run there. But looking at new macro realities and consumption in particular, do you think we’ll go through that phase of consolidation? First of all, do we warrant that?
Supam Maheshwari
Look, it’s a fair question. I think players who are nimble, who are agile, will evolve. You’re right in the observation that we had all seen a very good filip post Covid During COVID and post Covid period retail saw a lot of jump I think in this phase of the journey for at least maybe till the time the whole macros change.
I think some of these moments give us give opportunities to players. At least that’s what we believe is the management team of Oscar I believes that periods like these are good periods for us to be able to strengthen our modes, strengthen our operating capabilities and you know, as and when the winds turn around will give us the, you know, significant Philip, in a very short period of time to be able to capitalize and deliver sort of an outperformance on numbers because those factors that would have helped us to be on, you know, improving and perfecting some of those things, whether it is related to last mile logistics, whether it is related to tech, merchandising, personalization, store, sort of a wallet shares, unit economics.
I think all of those things will actually make us more nimble more and, and I can only sort of comment and assure, you know, all of you that we as a team are at least in that cohort of companies which will be, will be far more nimble and will be able to deliver and, and, and and be able to capitalize when the wind turns around. So I think that’s how I would summarize it. Yes, we are all going through that phase but we will, you know we remain very confident. We as a team in over last 15 years have seen some, several cycles like that. Personally I’ve seen more but as a team together also we have seen few cycles like that. But I think I think it just makes us stronger.
Tejash Shah
Sure. And the last one, if I may, customer additions have dropped dramatically. So just wanted to know how should we read on that from market lens, market share lens perspective?
Supam Maheshwari
You want to take that? You want me to.
Vivek Goel
So, Tejas, customer, customer additions, in terms of both, all our numbers remain pretty stable, Right. The CAC and other factors are also quite stable from that window. I think some of the challenges which we mentioned earlier, as they get solved, we can potentially see that we can see a better acceleration in that front and in July we have already seen that. So as super mentioned. So it will reflect in overall numbers as well as the individual acquisition numbers as we move forward in the following quarters.
Tejash Shah
Thanks and all the best for coming q uarters.
Supam Maheshwari
Thank you.
Anish Arora
Thank you, Tejas. Next question is from Sukrit. Sukrit, please unmute yourself, introduce yourself in the organization and please ask your question.
Sucrit Patil
Yes, good evening to the First Cry team. Am I audible? Yes. Yes. Yeah. So good evening and my name is Sukrut Patil from Eyesight Fintrade Private Limited. And my question is to Mr. Supam Maheshwari. First of all, I’d like to congratulate the entire team on a strong traction in the omnichannel engagement and private label growth. So my question is, given First Cry’s deep access to early parent parenting cohorts and the expanding offline footprint, how are you thinking about evolving the platform from a commerce led model to a life cycle led ecosystem, potentially integrating services like early education, health or fintech specifically tailored to parenting milestones? And is there a roadmap to monetize trust and data across the many verticals beyond retail? Yeah, thanks.
Sucrit Patil
Good question, Sukrit. So look, I think I would just simply say that we’re already in early education. As you know, we have 300 plus preschools that we operate quite profitably. That is part of our fourth segment that it’s a small one for us, but from a strategy window, it has very beautiful outcomes for us over a period of time when we will have thousand preschools, you will imagine that the strategic benefit that preschools will give us along in any catchment. In thousand catchments over a period of time, we’ll have our stores, we’ll have a preschool that essentially helps us to build brand salience with the customers in an offline way. While online, obviously we are present. So that helps us to, you know, reduce our marketing spend over a longer period of time as we continue to reinforce our brand in those vicinities of that catchment.
So that’s While generating an asset light profitable, very strongly profitable business sort of a model as far as preschool is concerned. So that is an identified opportunity. We started in 2019, obviously we had Covid and then we continued post Covid a good traction on that front. While on the some of the other opportunities that you talked about, whether it is health related or fintech related, at this moment we are not going for any new opportunities. Yes, these opportunities or you know, over a longer horizon we will evaluate but at this moment we will remain focused on largely the four verticals that we have been working towards which is India multi channel.
It says we strongly believe it’s a very huge opportunity for us to continue to nail down that international UAE KSC business. We have to make this business profitable on a shorter time frame. Third, obviously global bees continue to do well and fourth is this preschool. So we will continue to remain in this sort of a spectrum. Right now once we have outperformed in some of this, where we feel we have reasons to think beyond that is when we will probably think about moving towards health or fintech kind of an opportunity. They are relevant, they can add to our ecosystem. You’re absolutely right. But at this moment they may not be the right set of opportunities for us to sort of address.
Sucrit Patil
Great Supam. That was a very good guidance. Just wanna just to close the loop. I just want to understand, just want to pick your brains as a CEO of the company as you explore these adjacent opportunities. I want to understand how do you internally evaluate which verticals to pursue whether you know it’s early learning, health or financials. And is there a strategic framework that guides you on how to balance between the brands, evaluate the monetization potential and the execution complexity in each of the frameworks?
Supam Maheshwari
Sure. So while I can answer on this and to save everybody’s time, we can discuss this particular question offline but I can just guide you simply. You look at strategic benefit for the company, for the core business. That’s the fundamental point. The strategic benefit has to be really, really super strong. And then you look at from a ROS window in terms of time frame. So like a health business can be very investment unfriendly for the initial few few years, which is what we don’t want to do it right now. School business, preschool business was very friendly from a ROS perspective because pretty much it has an infinite roasting while it serves our strategic objective.
That’s how we got into it and we are scaling it up and we’ll continue to scale this up. So maybe this is a. This is like a broad framework, strategic benefit, and a clear focus and eye on the ROI perspective. You align these two. Once these two things filter out some of these opportunities, then you think, whether you want to. Then you go to the execution part in terms of how you execute, how easy is to execute, and so on, so forth. So that’s a broad framework, but we can get into more specifics, maybe offline. I hope that helps.
Sucrit Patil
Great. Yeah. Yeah. Great. Great. Thank you very much, and I wish the entire team best of luck for all your future endeavors.
Anish Arora
Thank you. Sukhru. We would request the participants to raise your hands in case anyone has any questions.
Gautam Sharma
Perfect. Okay. All right. Thank you, everyone.
Vivek Goel
Okay. Thank you.
Anish Arora
Thank you, everyone.