Brokerage firm Kotak has initiated coverage on Meesho Ltd. with a 'reduce' rating with a target price of Rs 195 per share. The target price is slightly above the current market price of Rs 193, implying an upside of about 1%.
Kotak said Meesho is India's largest e-commerce marketplace by number of users, with 264 million annual transacting customers in FY2026. The company also reported 2.7 billion orders during the year. The brokerage said Meesho has built a large horizontal platform that continues to show healthy growth. It expects the company's annual transacting customers to rise to 391 million by FY2029, helped by its affordable and accessible platform.
Kotak said Meesho's asset-light and value-focused model is designed to serve all customer segments. The company operates as a pure-play e-commerce marketplace and does not own inventory. Its zero-commission model for sellers and low transaction costs are expected to help improve product assortment and increase order frequency over time.
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Valmo Factor
The brokerage also noted Valmo, Meesho's logistics aggregator platform, which currently handles about 60-65% of Meesho's total shipments. Kotak said Valmo helps keep logistics costs low by using the capacity of smaller, low-cost players and by diversifying Meesho's logistics partner base.
Kotak expects Meesho's net merchandise value and revenue to grow at a compound annual growth rate of 28% each between FY2026 and FY2029. It said growth will be driven by a rise in users and order frequency, even as average order value gradually declines.
The brokerage expects Meesho to reach Ebitda breakeven by FY2029, helped by higher advertising monetisation, lower logistics costs, reduced customer acquisition spending and operating leverage. However, Kotak said Meesho's healthy long-term growth potential, asset-light model and improving profitability already seem priced in at current levels.
ALSO READ: 75% Orders Linked To AI Use: Meesho CEO Opens Up On Gaining Edge In E-Commerce Race
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