Macquarie keeps Underperform on Meesho, sees 30% downside to ₹125 target

Macquarie said Meesho’s low average order values and order frequency could constrain sustainable profitability. It forecasts 21% NMV CAGR from FY26 to FY29, but expects margins and NMV growth to trail broader market expectations.

— Source publishedTue, 28 Jul, 2026, 08:44 IST·First seen Tue, 28 Jul, 2026, 08:59 IST·Source NDTV Profit

What happened

Macquarie retained an Underperform rating on Meesho, citing low average order values and insufficient order frequency as barriers to sustainable profits. It

Key facts

  • Underperform rating
  • Rs 125 target price
  • 30% implied downside
  • 21% NMV CAGR forecast for FY26-FY29
  • 300-450 basis point contribution margin and adjusted EBITDA margin improvement
  • NMV forecast around 400 basis points below Visible Alpha consensus
  • Adjusted EBITDA margin estimate about 80 basis points below Street expectations

Why this matters

A slower NMV trajectory and margin constraints may limit Meesho’s strategic flexibility, elevating the value of partnerships or acquisitions that strengthen frequency, monetization and unit economics.

What to watch

  • NMV growth versus the 21% FY26-FY29 CAGR forecast and versus Visible Alpha consensus.
  • Order-frequency, repeat-purchase and active-user cohort trends, especially after reducing incentives.
  • Average order value and the share of low-ticket orders, which determine delivery-cost absorption.
  • Contribution margin per order, fulfillment expense as a percentage of NMV and logistics-network utilization.
  • Advertising and seller-services revenue growth, take-rate expansion and seller retention.
  • Competitive pricing actions by Amazon, Flipkart, Shopsy and value-commerce peers.
  • Any revision to profitability, EBITDA breakeven or cash-flow guidance.
  • Management is likely to emphasize contribution-margin progression, repeat-rate cohorts and fulfillment-cost improvements in upcoming disclosures.
  • The company may increase monetization through seller advertising, logistics services and selective platform fees rather than broad consumer price increases.
  • Competitive value-fashion and marketplace promotions could intensify, raising customer-acquisition and shipping-subsidy risk across the low-AOV segment.
  • Sell-side estimates may shift from top-line GMV/NMV focus toward order economics, take rate, adjusted EBITDA and cash-burn milestones.