Summary:
Meesho shares gained up to 12% after a brokerage raised its target price to ₹260 from ₹210, citing stronger growth and improving marketplace economics. Rising NMV, users and sellers, alongside narrowing losses, support the outlook, while valuation remains a key consideration.
Shares of Meesho witnessed strong buying interest after a global brokerage raised its target price on the e-commerce platform, citing improving business momentum, expanding user base and better operating performance. The stock gained sharply during the session, rising as much as 12% to touch ₹245 on the BSE after the target price was increased to ₹260 from ₹210.
The revised target reflected expectations of stronger medium-term growth, supported by improvement in marketplace economics, higher monetisation from advertising and lower logistics costs. The company’s expanding buyer and seller ecosystem has remained a key factor behind the positive outlook.
Why Meesho shares surged after the upgrade
The optimism around Meesho has been linked to its improving operational metrics. During Q1 FY27, the company reported revenue from operations of ₹3,712.81 crore, registering a growth of 48.3% year-on-year and 5.1% quarter-on-quarter. Net merchandise value (NMV) increased 34% year-on-year to ₹11,614 crore, supported by higher customer engagement and platform activity.
The company has also seen improvement in marketplace efficiency. Contribution margin expanded to 4.6% of NMV, while marketplace adjusted EBITDA improved to negative 1.2% of NMV, indicating better unit economics compared with earlier periods. Annual transacting users increased 29% year-on-year to 274 million, while placed orders rose 29% to 725 million. Purchase frequency improved to 10.3 transactions per user annually.
Seller participation has also expanded, with annual transacting sellers reaching more than 1.04 million, an increase of 81% year-on-year. Around 45% of sellers were from Tier 2 and smaller towns, highlighting the company’s focus on markets beyond major cities. Seller growth in Tier 4 towns increased 125% year-on-year.
Improving financial performance supports investor interest
Meesho’s financial performance has shown gradual improvement. The company’s adjusted loss after extraordinary items narrowed to ₹132.84 crore in Q1 FY27 compared with ₹215.92 crore in Q1 FY26 and ₹166.35 crore in Q4 FY26. Last-twelve-month free cash flow improved by around 15% to negative ₹537 crore from negative ₹633 crore in the previous quarter. As of June 30, 2026, Meesho had a cash balance of ₹6,521 crore.
The company’s growth expectations have also been revised higher for the longer term. Estimates for FY29-FY31 net merchandise value were increased by 7%-18%, while contribution profit estimates were raised by a similar range. EBITDA estimates for the period were increased by 20%-40%.
Valuation risks remain despite strong momentum
While Meesho’s growth story has attracted investor attention, valuation remains an important factor. The stock has already seen a strong movement after listing, gaining significantly from its IPO price of ₹111.
Earlier views on the stock highlighted concerns around stretched valuations and the need for sustained execution in areas such as advertising revenue growth, order expansion and logistics savings. The company will need to continue improving profitability and converting growth into earnings expansion to support current market expectations.
What investors will track going ahead
The key factors for Meesho will include growth in NMV, customer retention, seller additions, advertising monetisation, logistics efficiency and progress towards profitability. The recent share price movement reflects improved sentiment following higher growth expectations, but future performance will depend on whether operational improvements continue at the expected pace.
