Meesho Ltd. reported a 34% year-on-year rise in revenue for the second quarter of FY27, while its net loss narrowed to Rs 132 crore. Brokerages Citi and Jefferies maintained their Buy ratings on the stock and raised their target prices, indicating strong marketplace growth and improving contribution margins.
Both brokerages highlighted the 23% growth in net merchandise value and expansion in contribution margin to 6%. However, higher customer acquisition and technology spending remain near-term concerns, even as festive demand and advertising monetisation offer potential avenues for improving profitability.
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Meesho Q2 Results: Key Highlights (Cons, YoY)
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- Net loss narrowed to Rs 132 crore from Rs 411 crore.
- Revenue up 34.4% to Rs 4,132 crore vs Rs 3,074 crore.
- Ebitda loss narrowed to Rs 229 crore from Rs 456 crore.
- Marketplace revenue rose to around Rs 4,120 crore from Rs 3,071 crore.
- Revenue from new initiatives increased to Rs 11.7 crore from Rs 2.3 crore.
- First-half revenue rose to Rs 7,844 crore from Rs 5,578 crore.
Also Read: Meesho Q2 Results: Net Loss Narrows To Rs 132 Crore; Revenue Jumps 34%
Citi: Buy | Target Price: Rs 265
- Raises target price: Citi increased its target price to Rs 265 from Rs 220 and maintained its Buy rating.
- Marketplace growth remains strong: Meesho's net merchandise value grew 23% year-on-year in the second quarter, while contribution margin expanded to 6%.
- Spending weighs on earnings: Higher customer acquisition and technology expenses could put pressure on near-term profitability.
- Festive demand offers support: Strong festive demand and higher advertising monetisation could help improve profitability over time.
Jefferies: Buy | Target Price: Rs 285
- Raises target price: Jefferies raised its target price to Rs 285 from Rs 240, retaining its Buy rating.
- Revenue and NMV growth: Revenue increased 34% year-on-year in the second quarter, and Jefferies also pointed to net merchandise value rising to 23%.
- Logistics efficiencies improve margins: Contribution margin expanded to 6% as better logistics efficiency helped reduce losses.
- Growth remains the priority: Jefferies highlighted that the company's management is targeting a 25% compound annual growth rate in net merchandise value through fiscal 2031, prioritising growth over monetisation.
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