Shares of Meesho Limited gained on Wednesday after brokerage firm Jefferies initiated coverage on the company with a “Buy” rating and a target price of Rs. 225.
The target implies an upside potential of 34.77% from the previous closing price of Rs. 166.95.
The stock rose as much as 4.61% to an intraday high of Rs. 174.65. It later gave up most of the gains and was trading at Rs. 167.05. Meesho’s market capitalisation stood at Rs. 76,814.63 crore.
Why Jefferies is positive
Jefferies expects Net Merchandise Value (NMV) to grow at a 25% compound annual growth rate (CAGR) through FY30.
According to the brokerage, Meesho’s position in India’s value-commerce market and its large user base support long-term growth.
Jefferies highlighted several factors behind its outlook:
- Strong presence in value-focused e-commerce.
- A wide network of MSME suppliers.
- Focus on affordable products.
- Product discovery features aimed at increasing engagement.
- Logistics capabilities that support operations.
- Scope for improvement in take rates as scale increases.
The brokerage also expects adjusted EBITDA margins to reach around 3% by FY30.
Meesho’s net cash position and negative working capital model were cited as factors supporting capital-efficient growth.
User base and platform activity
Meesho said it had 264 million annual transacting users.
During Q4 FY26, the platform processed 717 million orders.
The company has also rolled out PRISM, its in-house AI-powered recommendation engine.
PRISM recommends products based on customer interests and shopping behaviour. Meesho said more than 75% of orders now come through personalised recommendations.
Quarterly performance
Revenue in Q4 FY26 rose to Rs. 3,531 crore, compared with Rs. 2,400 crore a year earlier.
That marks a growth of 47.13%.
Net loss narrowed sharply during the quarter.
- Q4 FY25: Rs. 1,391 crore loss
- Q4 FY26: Rs. 166 crore loss
Key financial metrics
Over the last three years, revenue has grown at a 30% CAGR.
Other indicators include:
- ROCE: -35.6%
- ROE: -42.3%
- EPS: Rs. -2.97
- Debt-to-equity ratio: 0.01x
Business profile
Founded in 2015, Meesho Limited operates a multi-sided digital commerce platform connecting consumers, sellers, logistics partners and content creators.
Its operations are divided into two segments:
Marketplace segment
- Facilitates transactions between buyers and sellers.
- Earns revenue from order fulfilment, advertising and seller analytics.
New Initiatives segment
- Expands the company’s low-cost logistics network for daily essentials.
- Builds digital financial services for consumers and sellers.
TL;DR:
Meesho shares rose after Jefferies initiated coverage with a Buy rating and a target price of Rs. 225. The brokerage expects NMV to grow at a 25% CAGR through FY30 and sees adjusted EBITDA margins reaching about 3% by then.
AI summary:
- Jefferies initiated coverage on Meesho with a Buy rating.
- Target price of Rs. 225 implies 34.77% upside.
- Brokerage expects NMV to grow at a 25% CAGR through FY30.
- Q4 FY26 revenue rose 47.13% to Rs. 3,531 crore.
- Net loss narrowed to Rs. 166 crore from Rs. 1,391 crore.