BROKRAGE BOOST----> FIRSTCRY May Finally Have a Reason to Smile! Morgan Stanley Sees Structural Growth Recovery

Morgan Stanley has maintained an Equal-weight rating on

(FirstCry) with a target price of ₹300. The brokerage sees encouraging signs in India's revenue growth, but the latest quarter also highlighted pressure on margins. ------->Key Takeaways from Morgan Stanley 1. Q1 Margin Miss FirstCry's Q1 margins came in below expectations. The key reasons were: • Intense competition in the diaper category • Higher manufacturing costs These factors weighed on India's profitability. 2. India Revenue Growth Is Improving This is perhaps the most encouraging part of the report. Morgan Stanley believes the improvement in India revenue growth is structural, rather than just a temporary recovery. That could be important for FirstCry because India remains the company's core growth opportunity. 3. FY27 Growth Could Remain Strong Morgan Stanley expects growth to remain elevated through FY27. The company is being supported by strategic initiatives aimed at: • Increasing customer reach • Expanding its product ecosystem FOCUS STOCKS:: !NYKAA !ETERNAL !SWIGGY ------->Bottom Line FirstCry's Q1 showed a classic growth-vs-margin story. India growth is improving and Morgan Stanley sees this improvement as structural, which is a positive sign. But near-term margins remain under pressure because of diaper competition and higher manufacturing costs. If price pass-through works as expected and manufacturing margins recover from Q2, the earnings picture could improve. Morgan Stanley: Equal-weight | Target Price: ₹300 The key question now isn't just how fast FirstCry grows — it's how quickly that growth can translate into better margins.