In the previous session, international brokerage firm UBS initiated coverage with a Buy rating on the counter and a target price of Rs 220, which the stock has already surpassed. UBS said the company’s asset-light, negative working capital business model has enabled consistent positive cash flows—unlike many other internet-led businesses.
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The brokerage predicts a robust 30% CAGR in Net Merchandise Value (NMV) over FY25–30E, with contribution margins and adjusted EBITDA margins (as a percentage of NMV) improving to 6.8% and 3.2%, respectively, by FY30E. UBS expects NMV growth to be driven by a sharp expansion in annual transacting users from 199 million to 518 million, alongside an increase in annual ordering frequency from 9.2 to 14.7, even as average order values moderate from Rs 274 to Rs 233 as the company passes on logistics efficiencies to the broader ecosystem.
Meesho made its stock market debut on December 10, listing at a premium to its issue price and closing its first session 53% above the Rs 111 IPO price. After a two-day decline, the stock gained more than 3% on Monday before extending its rally on Tuesday, even as broader markets remained under pressure.
Meesho’s three-day IPO, sized at over Rs 5,000 crore, drew strong demand from both institutional and retail investors. The issue was subscribed 79 times overall, with the retail portion subscribed more than 19 times.
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