FirstCry CEO Supam Maheshwari expects many niche quick-commerce players to fail due to high logistics costs and lack of scale. While FirstCry leverages its physical store network to compete, the company recently reported a margin decline amid intense industry competition. Investors are closely monitoring how the retailer manages these costs as the stock trades near its 52-week low.
FirstCry CEO Supam Maheshwari has issued a stark warning regarding the future of quick-commerce, predicting that many niche players will likely face consolidation or failure. He argues that the business model, which relies on heavy spending for logistics and customer acquisition, is often unsustainable for smaller platforms that lack the necessary scale to achieve long-term profitability.
To navigate this competitive landscape, FirstCry is banking on its existing infrastructure rather than building a standalone quick-commerce model from scratch. The company is currently using its 'Qwik' service, supported by its logistics arm, RocketBees, and its physical store network. By integrating these assets, FirstCry aims to deliver a wider array of products, such as apparel and strollers, rather than limiting itself to just emergency items like diapers or baby formula. The retailer plans to add nearly 100 new stores in the current fiscal year to further strengthen this omnichannel reach.
Despite this strategy, FirstCry faces tangible financial pressures. In its first-quarter results for fiscal year 2027, the company reported a consolidated revenue of ₹2,106 crore, reflecting a 13% increase compared to the previous year. While the loss after tax narrowed by 34% to ₹439.52 crore, operational challenges remain evident in its margins. The company's consolidated gross margin slipped to 36.5% from 38.5% in the same quarter last year. Management has pointed to fierce competition in the diaper category and rising raw material costs as the primary drivers behind this compression.
The market has reacted with caution to these headwinds. FirstCry shares (FIRSTCRY) have been under consistent pressure, recently trading near their 52-week low of approximately ₹186. Investors are balancing the company’s top-line growth against the reality of margin volatility and the high costs associated with maintaining a rapid delivery network in an intensely crowded retail space.
Looking ahead, the company’s ability to defend its market share will depend on several factors. Investors will be tracking whether the shift toward higher-value products and the use of in-house brands, which now contribute over 58% of the company's gross merchandise value, can successfully offset the pressure on margins. Additionally, the pace of store expansion and the efficiency of the RocketBees logistics network will be important markers of whether the company can sustain its growth without continuing to see a squeeze on profitability.