Meesho Limited shares closed at ₹162.38 on Friday, declining 1.16% from the previous close of ₹164.29, as the recently-listed e-commerce platform continues to trade below its December highs. The stock has experienced significant volatility since its market debut, falling nearly 11% year-to-date and approximately 36% from its 52-week high of ₹254.40 reached on December 18, 2025.

Brokerage Coverage Initiations

Two major brokerages have initiated coverage on Meesho with cautious ratings despite acknowledging the company's strong market position. The research reports present a mixed outlook for the e-commerce platform.

Both brokerages cite limited upside potential at current valuation levels, suggesting the stock appears fully valued despite its recent decline from highs.

Strong Market Position and User Base

Both research reports highlight Meesho's dominant position in India's value e-commerce segment. The platform demonstrates impressive scale with significant market penetration across the country.

JM Financial expects the company to account for 99% of India's online shopper base by fiscal 2030, up from approximately 90% currently, indicating strong market expansion potential.

Financial Projections and Profitability Concerns

Analysts project robust revenue growth for Meesho, with JM Financial forecasting a 27% compound annual growth rate between fiscal 2025-2030. However, profitability remains a key concern for investors and analysts.

The company reported adjusted EBITDA losses of 3.20% of net merchandise value in the first half of fiscal 2026. Despite current losses, analysts expect improvement with break-even projected by fiscal 2028.

Business Model and Market Opportunity

Meesho's business model focuses on serving price-sensitive consumers primarily in tier 2-4 cities, with low average order values of around $3.00. The company operates an asset-light marketplace model with zero commission structure for sellers, instead monetizing through logistics services and advertising revenue.

Morgan Stanley estimates the platform's serviceable addressable market could reach $600-653 billion by fiscal 2030, indicating substantial long-term growth potential for the e-commerce segment.

Key Risk Factors

Analysts have identified several risk factors that could impact Meesho's performance. A key concern is the company's logistics spread, which came under pressure in the first half of fiscal 2026 due to industry consolidation.

JM Financial also flagged potential supply pressure when pre-IPO lock-in periods expire in June 2026, with over 50% shareholding held by venture capital and private equity investors. This could create additional selling pressure on the stock.

Trading Metrics

The stock, which listed on December 10, 2025, currently trades with an impact cost of 0.04% and daily volatility of 1.89%, indicating relatively liquid trading conditions despite the recent price decline.

Meesho's spectacular post-IPO performance has hit turbulence, with shares declining 35% from their peak amid mounting valuation concerns and increased supply following the anchor lock-in expiry. The e-commerce platform, which listed on December 10 at a 46% premium, witnessed an extraordinary 129% rally that pushed the stock to ₹254.40 before the recent correction set in.

Stock Performance and Current Pressures

The company's shares have experienced significant volatility since reaching their peak, falling to a low of ₹153.89 before entering recovery mode. According to Abhinav Tiwari, Research Analyst at Bonanza, multiple factors are contributing to the ongoing pressure on the stock.

"This lock-in related supply, combined with broader risk-off sentiment toward high valuation new age stocks, has resulted in valuation de-rating, even as the underlying business performance remains largely intact," Tiwari explained. Market data indicates that up to 110 million shares, representing approximately 2% of the company's outstanding equity, have become tradeable following the lock-in expiry.

Brokerage Recommendations and Valuations

Recent analyst coverage reflects cautious optimism tempered by valuation concerns. JM Financial has initiated coverage with a 'Reduce' rating, setting a DCF-based target price of ₹170 per share for March 2027. The brokerage's valuation analysis yields equity value implications of 108x/25x FY28/FY30 EV/adjusted EBITDA multiples.

BofA Securities has also initiated coverage with a 'Neutral' rating and price target of ₹190 per share, suggesting 15% upside from current levels. JM Financial noted that while the stock price has run up sharply, it leaves minimal room for error despite the company's differentiated business model and key position in Indian e-commerce.

Operational Strengths and User Metrics

Despite market pressures, Meesho's operational fundamentals remain robust. The platform boasts 286 million monthly active users, the highest among Indian e-commerce platforms. Significantly, around 234 million users made at least one purchase during the year, demonstrating strong conversion rates particularly in smaller towns.

"This shows that Meesho is not just a browsing app but has strong conversion from users to buyers, especially in smaller towns," Tiwari highlighted.

Logistics Efficiency Improvements

The company has demonstrated significant operational improvements, particularly in logistics efficiency. Cost per order has decreased substantially from ₹55 in FY23 to ₹46 in FY25, achieved through building its proprietary logistics platform called Valmo and improving delivery density.

Additionally, cash on delivery orders have reduced from more than 90% to approximately 61% in the first half of FY26, further helping reduce delivery failures and associated costs. JM Financial noted that Meesho has perfected the e-commerce digitisation template for Bharat with significant headroom for online penetration in regional and unbranded products, with market-dominating volume at low margins providing substantial competitive advantage.