Macquarie initiates ‘Underperform’ rating on Meesho, sees 25% downside. Here’s why
It set a target price of Rs 125 per share for Meesho, implying a downside potential of nearly 25% from the stock’s previous closing price of Rs 165.95 apiece on NSE. “The current share price embeds Meesho’s growth flywheels remaining in overdrive for the next five years alongside sharp platform monetisation,” it added.
Macquarie highlighted that Meesho has become India’s largest value-focused e-commerce platform, scaling to 26.5 crore Annual Transacting Users (ATU) in less than five years. The retail company serves a predominantly tier 2/3+ consumer base, and even as it has expanded further into ‘Bharat,’ aggregate engagement metrics for the platform have continued to improve, it added.
“Meesho’s value positioning results in lower average order values (AOVs), but this growth-led strategy limits the addressable revenue pool. Meesho also passes through logistics savings from insourcing, although Valmo has delivered mixed results. While contribution margin (CM) as a percentage can improve with higher sponsored listings, CM per order remains modest at ~Rs 6, and we expect this to rise only gradually to ~Rs 11–12 over the next five years,” Macquarie said.
Given modest per-order economics, the international brokerage noted that meaningful EBITDA generation requires both ATU and order frequency, the key swing variable, to rise rapidly and compound together. As part of its bull case, Macquarie assumes stronger marketplace NMV growth (25% CAGR, or 3x in five years), for which it assigns a 25% probability. However, the international brokerage believes the stock already reflects this aggressive growth and higher margins, leaving limited room for execution slippage.
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Meesho share price
Meesho made a strong debut on the stock market in December, listing at Rs 162.50 per share on the NSE, a premium of over 46% from its IPO price of Rs 111. Its Rs 5,421-crore IPO was subscribed 79 times during the three-day public offering.
The stock initially surged, rallying up to 129% from its IPO price within seven sessions to hit a high of Rs 254.40. However, the rally lost momentum over the following months.
Meesho shares have fallen around 10% in the last week and 19% in one month to close at Rs 165.95 apiece on NSE. The shares of the retail company have declined by around 9% in 2026 so far.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
