Meesho Shares Locked In Upper Circuit After UBS Initiation — Check Target Price

Shares of Meesho are buzzing in trade on Wednesday and is now locked in an upper circuit after an initiation from UBS, which has put out a positive note on the counter.

The stock is currently trading at Rs 216, which accounts for gains of 20% compared to Tuesday's closing price of Rs 180. The stock is, therefore, locked in an upper circuit.

The positive sentiment in Meesho comes as UBS initiated coverage on the counter with a 'buy' rating and a target price of Rs 220.

The brokerage firm has highlighted how Meesho has democratised online shopping in villages and rural areas of India.

UBS predicts a large growth runway for Meesho for a period ranging up to FY30, with a visible path to profit and cash generation.

Furthermore, UBS sees contribution margin and adjusted Ebitda margin reaching 6.8% and 3.2% by FY30, effectively meaning that the road ahead for Meesho remains strong.

Sentiment around Meesho has also been aided by its founder, Vidit Aatrey, becoming a billionaire thanks to the solid upmove the stock has shown since listing.

Shares of Meesho got listed on Dec. 10 at Rs 161, with a solid premium of 45%. Since then, the stock has gained more than 20%. Compared to the issue price of Rs 111, the stock has moved over 75%.

Aatrey, who owns 11.1% stake in Meesho, is currently valued at over Rs 9,000 crore, thanks to Meesho's impressive stock performance since listing.

Despite the solid upmove, however, shares of Meesho is currently trading at a relative strength index of 75, which suggests the stock could be in a overbought territory.