India, June 15 -- At least seven times during FirstCry's March-quarter earnings call, the company returned to a familiar theme: rationalisation.

Competition, the management suggested, was behaving irrationally. Discounting in key categories was irrational. Pricing pressures were irrational. The implication was that the current environment was an aberration, one that would eventually correct itself.

Public markets, however, appear far less patient. Since listing in August 2024, shares of Brainbees Solutions, FirstCry's parent company, have fallen nearly 70% from their peak, wiping out more than half of the company's market value. Today, Brainbees is worth roughly Rs.11,318 Cr.

What's striking is that the selloff has unfolded even as the...