With a target price of Rs 220, the international brokerage firm implies an upside of 22.2% from current market levels. UBS said the company’s asset-light, negative working capital business model has enabled consistent positive cash flows—unlike many other internet-led businesses.
The brokerage predicts a robust 30% CAGR in Net Merchandise Value (NMV) over FY25–30E, with contribution margins and adjusted EBITDA margins (as a percentage of NMV) improving to 6.8% and 3.2%, respectively, by FY30E. UBS expects NMV growth to be driven by a sharp expansion in annual transacting users from 199 million to 518 million, alongside an increase in annual ordering frequency from 9.2 to 14.7, even as average order values moderate from Rs 274 to Rs 233 as the company passes on logistics efficiencies to the broader ecosystem.
Meesho made its stock market debut on December 10, listing at a premium to its issue price and closing its first session 53% above the Rs 111 IPO price. After a two-day decline, the stock gained more than 3% on Monday before extending its rally on Tuesday, even as broader markets remained under pressure.
Meesho’s three-day IPO, sized at over Rs 5,000 crore, drew strong demand from both institutional and retail investors. The issue was subscribed 79 times overall, with the retail portion subscribed more than 19 times.
Former IITian and co-founder and chief executive officer of Meesho, Vidit Aatrey, entered the billionaire club on Tuesday as the e-commerce company’s shares extended their post-listing surge. With an 11.1% stake, equivalent to 47.25 crore shares, his net worth now stands at Rs 9,142.87 crore, or about $1.005 billion.
At about 9:30 am, shares of the company were trading at Rs 196.8, higher by 8.5% from the last close on the NSE. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)