Synopsis

Meesho shares witnessed a dip on Wednesday after 3.86 crore shares changed hands in a block deal worth Rs 899.71 crore on the BSE. The transaction came a day after the stock surged nearly 10% following UBS’ 24% target price hike.

UBS, Ventura and CLSA have divergent views on Meesho’s growth prospects, margins and valuation.

Meesho shares fell nearly 4% on Wednesday, giving up part of Tuesday’s sharp gains. The decline came as a large block deal worth around Rs 900 crore was reported on the BSE.

As many as 3.86 crore Meesho shares changed hands in a block deal at Rs 233 apiece, taking the total value of the transaction to Rs 899.71 crore, ET Now reported.

Meesho shares dropped to an intraday low of Rs 230.94 apiece on the NSE in morning trade, a day after surging nearly 10% after brokerage firm UBS raised its target price on the stock by 24% to Rs 260.

UBS maintained its ‘Buy’ rating on the shares of Meesho, and said its target price hike reflects higher medium-term growth estimates and a stronger margin trajectory. While the international brokerage’s FY27 estimates are largely unchanged, it raised its FY29-31 Net Merchandise Value (NMV) estimates by 7-18%, with a similar increase in contribution profit estimates and a 20-40% increase in EBITDA estimates.

Also read | Meesho shares rally after UBS hikes target price by 24%. What’s keeping analysts bullish?

Higher NMV forecasts reflect the continued flywheel from sellers (+81% YoY to 1.04 million in Q1FY27), buyers (+29% YoY to 274 million), coupled with rapid expansion in SKUs and logistics partners, UBS said. It added that the larger increase in EBITDA reflects a stronger medium- term margin trajectory, driven by improving ads monetisation and logistics economics.

“Meesho’s focus on value commerce in a low income yet digitally savvy market like India opens a sizeable growth opportunity,” UBS concluded.

Ventura Securities last month initiated coverage on Meesho with a ‘Buy’ call and a target price of Rs 278 apiece. For Meesho, Ventura said India’s e-commerce market is entering a structural growth phase, helped by internet penetration, digital payments and online retail adoption across Tier II, Tier III and rural India. The brokerage said Meesho has built itself as a leading value-commerce marketplace, serving over 274 million annual transacting users and more than 9.61 lakh sellers through a zero-commission, asset-light platform.

CLSA, however, maintained its ‘Underperform’ rating and target price of Rs 150 apiece earlier this month, saying that the stock already reflects overly optimistic expectations for advertising revenue, order growth and logistics savings.

Also read | Bajaj Finance shares jump 3% after UBS upgrades to Neutral, hikes target price while Jefferies screams Buy

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

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