BofA initiates buy call on this newly listed company; estimates 20% potential gains

As the company is strongly positioned with multiple levers, the company is treading the clear path to profitability.

The company's positioning remains strong with multiple levers across businesses with a clear path to profitability.

Shares of Firstcry parent entity Brainbees Solutions are in focus in Thursday's session as global brokerage BofA initiated buy call on the stock with a target price of Rs 770. The set target implies potential gains of 20 per cent over the last close.

The stock made decent listed gains and entered the listed space on August 13 with gains of 40 per cent at Rs 651 as against the issue price of Rs 465 per share.

According to the brokerage, the company is competitively well-positioned in a rational MBK (mother, baby and kids) market. The company's positioning remains strong with multiple levers across businesses with a clear path to profitability.

The brokerage believes that with improving fundamentals in all businesses; the company's margins may surprise.

Primarily Firstcry is a niche vertical online commerce platform and has presence in Middle East and has private labels and offline stores.

Meanwhile, Morgan Stanley initated overweight call on the stock with a still higher target at Rs 818, implying over 27 per cent potential gains in the stock. The brokerage said that Brainbees is well placed to capitalize on India's growing childcare market. The global brokerage also sees some option value through Globalbees Brands.

Despite strong share-price performance since listing believe current valuations indicate further upside, added Morgan Stanley.

The brokerage benchmarks Brainbees stock against Indian consumer discretionary stocks given similarities in growth and steady-state EBITDA margin profiles.