Meesho rises 4% post Q4 results; analysts turn cautious on rich valuations

Shares of Meesho were trading higher on the bourses on Thursday, May 7, after the company announced its financial results for the quarter and financial year ended March 31, 2026.

 

Following the announcement, the company’s share price climbed 4.1 per cent to ₹211.34 during morning deals on Thursday. Although the stock pared some gains later, it continued to witness healthy buying interest from investors. At 10:10 AM, Meesho shares were trading at ₹202.21 apiece, up 3.2 per cent from the previous close of ₹196.28 on the NSE.

 

Brokerages, meanwhile, turned cautious on Meesho following its Q4 results. Analysts at Choice Institutional Equities downgraded their rating to ‘Add’, citing limited upside from current levels, while those at JM Financial retained a ‘Reduce’ rating, citing rich valuations and limited room for execution misses despite improved earnings estimates.

 

Meesho Q4 results

The company narrowed its quarterly losses sharply, reporting a net loss of ₹166.3 crore in Q4FY26, down 88 per cent from a year earlier. The company had posted a loss of ₹1,391.4 crore in the corresponding quarter last year and ₹490.7 crore in the preceding quarter.

 

For the full year, Meesho’s loss narrowed 66 per cent to ₹1,357.7 crore in FY26 from ₹3,941.7 crore in FY25. Revenue from operations rose 47.14 per cent year-on-year (Y-o-Y) to ₹3,531.21 crore in Q4FY26. 

 

In Q4FY26, NMV stood at ₹11,371 crore, up 43 per cent Y-o-Y. Placed orders during the quarter rose 43 per cent Y-o-Y to 717 million, driven by continued new user onboarding as well as higher transactions from existing users. Normalised NMV growth for Q4FY26 came in at 39 per cent, adjusting for the earlier Meesho Blockbuster Sale ramp-up in Q4FY26 versus Q4FY25.  CHECK Stock Market LIVE Updates

Choice: Add | Target price ₹210

Analysts at Choice donwgraded their ‘Add’ rating on Meesho while retaining a target price of ₹210, based on 4.0x FY28E EV/revenue with a three-stage DCF used as a sanity check. The assigned target price is nearly15 per cent down from the current market price. 

 

Kunal Bajaj, and Avi Jhaveri of Choice said the Q4FY26 results reinforced their constructive medium-term view on Meesho, with user-led scale-up and continued expansion of the seller ecosystem driving strong underlying growth.

 

Management, they noted, indicated that logistics inefficiencies seen last year have largely been resolved, with around 4.0 per cent expected to serve as the baseline contribution margin going forward. The brokerage expects gradual improvement in contribution margin, supported by operating leverage from prior investments and steady progress in ad monetisation.

 

“While key operating metrics — user growth, seller additions, order frequency, and GMV-to-NMV conversion — have improved meaningfully, this has yet to translate into a material uplift in ad monetisation, which is expected to remain gradual,” the analysts said in a research report.

 

The brokerage added that with most near-term positives largely priced in, it sees limited upside from current levels.

JM Financial: Reduce | Target price ₹180

Brokerage firm JM Financial retained its ‘Reduce’ rating on Meesho with a DCF-based March 2027 target price of ₹180, implying 42x FY29 EV/adjusted Ebitda.

 

Swapnil Potdukhe, Sachin Dixit, Atul Borse, and Avnish Sharma of JM Financial raised their NMV estimates by 2–4 per cent over FY27-28 and adjusted Ebitda estimates by 4–5 per cent over FY27-28 following the Q4 results. The brokerage also lowered its WACC assumptions to 12.0 per cent from 13.0 per cent earlier due to improved break-even visibility.

 

“However, we maintain ‘Reduce’ as CMP leaves no margin for lapses. Separately, Meesho’s board approved further investment of up to ₹1.0 billion in Meesho Payments Private Ltd. through subscription to rights issue/further capital issuance in one or more tranches,” the analysts said in a report.

 

The analysts further pointed out that the stock currently trades at around 46x FY29E adjusted Ebitda, among the highest multiples in their internet coverage universe, leaving little room for any misses.

 

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