Meesho's marketplace net merchandise value grew 23% YoY in Q2 FY27, adversely impacted by the shift in festive sales to Q3 FY27 vs Q2 FY26. Adjusted for the festive shift, NMV growth was ~33% vs 34% in Q1. Demand during festive sales has been ahead of the brokerage's expectation, though high crude prices are leading to supply chain disruptions for sellers. Contribution margin expanded 143bp QoQ to ~6% vs estimate of 5.3%, led by logistics spread recovery.
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Motilal Oswal Report
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Following Meesho Ltd.'s September-qurarter results, domestic brokerage firm Motilal Oswal has reiterated its Buy rating with a revised target price of Rs 265, premised on 30 times FY31E adjusted marketplace Ebnitda, discounted to Dec'28E
Motilal Oswal believes Meesho's asset-light model with negative working capital and improving unit economics makes for a unique combination of a scaled platform business with a long runway for growth and potential margin inflection.
The brokerage has modelled a ~25% net merchandise value compound annual growth rate over FY26-31, driven by annual transacting users additions and rising platform adoption.
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Higher ad monetisation and normalising logistics spread should help drive contributing margin to ~7.8% by FY31 (vs 6% in Q2), while operating leverage should enable break-even in FY28, with adj. Ebitda margin rising to ~4% (vs - 1% in Q2).
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