Meesho rallies as brokerage raises target price

Meesho surged 9.56% to Rs 240 after a foreign brokerage maintained its 'buy' rating on the stock and raised its target price to Rs 260 from Rs 210.

The brokerage raised its net merchandise value (NMV) estimates for Meesho for FY29-FY31 by 7%-18%, along with a similar increase in its contribution profit estimates. It also raised its EBITDA estimates for the period by 20%-40%.

The brokerage attributed the higher NMV estimates to the continued expansion of Meesho?s buyer and seller ecosystems, along with rapid growth in stock-keeping units (SKUs) and logistics partners.

The brokerage expects Meesho?s earnings to grow faster than NMV over the medium term, supported by improvements in advertising monetisation and logistics economics.

Meesho?s adjusted loss after extraordinary items narrowed to Rs 132.84 crore in Q1 FY27 from Rs 215.92 crore in Q1 FY26 and Rs 166.35 crore in Q4 FY26.

Net sales increased 48.3% YoY and 5.1% QoQ to Rs 3,712.81 crore in the quarter ended 30 June 2026.

Operationally, NMV grew 34% YoY to Rs 11,614 crore, driven by continued user growth and engagement. Marketplace revenue from operations increased 48% YoY to Rs 3,707 crore, supported by improved delivery conversion, lower cancellations, lower Return-to-Origin (RTO) rates and higher platform monetisation.

Contribution margin expanded to 4.6% of NMV, up 54 basis points QoQ, while Marketplace Adjusted EBITDA improved to negative 1.2% of NMV, reflecting an improvement in marketplace economics.

Annual Transacting Users (ATUs) increased 29% YoY to 274 million, while placed orders rose 29% to 725 million. Purchase frequency improved to 10.3 transactions per user annually. Prepaid orders accounted for around 37% of shipped orders, contributing to lower cancellations and RTO rates.

The platform supported more than 1.04 million Annual Transacting Sellers, up 81% YoY, with 45% of sellers based in Tier 2 and smaller towns. Seller growth in Tier 4 towns increased 125% YoY.

Last-twelve-months (LTM) free cash flow improved by around 15% to negative Rs 537 crore from negative Rs 633 crore in the previous quarter. As of 30 June 2026, Meesho had a cash balance of Rs 6,521 crore.

Meesho is an Indian e-commerce marketplace focused on value-driven online shopping. It connects buyers with sellers across categories, with a strong presence in Tier 2 and smaller towns.

Meesho made its stock market debut on 10 December 2025. The stock is up 116.2% over its IPO price of Rs 111 and has gained 48.9% from its listing price of Rs 161.20.

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