Meesho shares jumped almost 9% after UBS maintained its ‘Buy’ rating and raised the stock’s target price to ₹260 from ₹210
UBS expects Meesho’s expanding buyer and seller bases, coupled with better advertising monetisation and logistics economics, to accelerate its medium-term earnings growth
The brokerage raised its FY29-FY31 NMV estimates by 7%-18% and its EBITDA forecasts by 20%-40%
Shares of ecommerce major Meesho
surged as much as 9.3% during the intraday trading after brokerage UBS maintained its ‘Buy’ rating on the stock and raised its target price to ₹260 from ₹210.
The stock touched an intraday high of ₹239.45 on the BSE. It was trading 8.9% higher at ₹238.55 at 11:25 IST.
At the current price, UBS’ revised target implies a further upside of around 9%. Meesho’s market capitalisation stood at ₹1.10 Lakh Cr (around $11.5 Bn).
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 projections. It also increased its EBITDA estimates for the period by 20%-40%.
UBS attributed its higher NMV projections to the continued expansion of Meesho’s buyer and seller ecosystems, along with the rapid growth in SKUs and logistics partners.
Meesho’s annual transacting sellers jumped 81% YoY to 10.4 Lakh in Q1 FY27, while its annual transacting users rose 29% to 27.4 Cr. The ecommerce platform’s NMV increased 34% YoY to ₹11,614 Cr during the quarter.
The brokerage expects Meesho’s earnings to grow faster than NMV over the medium term as the company improves advertising monetisation and its logistics economics.
In Q1 FY27, Meesho’s contribution margin expanded to 4.6% of NMV from 4% in the preceding quarter. Its adjusted EBITDA loss narrowed to ₹178.2 Cr from ₹230.1 Cr in the year-ago period.
The company also narrowed its consolidated net loss by 54% YoY to ₹132.8 Cr during the quarter, while operating revenue surged 48% to ₹3,707 Cr.
Meesho listed on the bourses in December last year. At its current price, the stock is trading nearly 115% above its IPO issue price of ₹111 and about 6% below its 52-week high of ₹254.65.
Source: Inc42
