Target: ₹195
CMP: ₹147
Meesho is well placed to benefit from e-com growth driven by rising tier-2+ penetration, leveraging its value play and ‘affordability’ flywheel to drive user growth and order frequency. Meesho with about 250 million ATUs (annual transacting users) is the market leader in unbranded/long-tail categories. Its strategy to drive the affordability flywheel by passing cost efficiencies, especially in logistics, to sellers – allowing them to offer affordable products – helps increase user penetration and order frequency.
Our analysis shows about 580 million users by FY30E across rural/urban India where Meesho can capture about 8 per cent of spend in its categories.
With about nine lakh sellers, a focus on unbranded assortment leading to clean attribution, high order frequency, and a discovery-led platform, ads become an important margin lever. We see ads scaling from about 3 per cent of NMV to about 6 per cent by FY30E.
Amazon Bazaar and Shopsy are structurally constrained by seller base, catalog and fulfillment economics inherited from higher‑ASP models.
Meesho’s flywheel should help it deliver 29 per cent NMV CAGR (FY26-30E). Rising ad percentage would lead to 25 percent revenue CAGR. Adj. EBITDA margin to expand to 3.1 per cent (FY30E), rising 620 bps on operating leverage. Asset-light model and negative working capital cycle support FCF.
We initiate with a Buy rating and TP of ₹195, valuing it at 4x EV/Sales (FY28E), in line with B2C internet peers.
Published on April 1, 2026