Morgan Stanley has initiated coverage with an overweight rating on Brainbees Solutions, the parent company of FirstCry, setting a target price of Rs 818, implying a 27% upside in the stock price against its previous close of Rs 641. The brokerage firm highlights several factors contributing to its optimistic outlook on the company, positioning Brainbees as a prime player in India’s burgeoning childcare market.
Morgan Stanley views Brainbees as a fundamental beneficiary of the growing childcare sector in India. The company’s flagship brand, FirstCry, has established a strong presence in the market, appealing to a wide customer base.
Brainbees is strategically positioned to leverage India’s expanding childcare market. The brokerage notes that multiple growth drivers and opportunities for profitability improvements are in place, suggesting a robust future for the company. Additionally, Morgan Stanley sees potential added value through Globalbees brands, which could further enhance Brainbees’ market position.
Despite the strong share-price performance since its listing, Morgan Stanley believes that current valuations indicate further upside. The firm advises benchmarking Brainbees’ stock against Indian consumer discretionary stocks due to similarities in growth and steady-state EBITDA margin profiles, reinforcing their positive outlook.
