According to reports from Upstox Securities and The Hindu BusinessLine, Meesho delivered impressive financial results for the March quarter, with revenue from operations rising 47.1% year-on-year to ₹3,531 crore. The company's net loss narrowed significantly by 88% year-on-year to ₹166.35 crore in Q4, though this improvement was largely due to a high base effect from exceptional items in the previous year. However, excluding exceptional items, the company's losses widened 45% year-on-year as operating margins came under pressure from aggressive growth investments. The company's contribution margin declined to 4% from 4.3% a year earlier, while adjusted EBITDA margin widened to -1.7% from -1.3% in Q4 FY25. This deterioration was primarily attributed to elevated spending on customer acquisition, with advertising and marketing spends as a percentage of net merchandise value increasing to 2.1% from 1.5% a year ago. Total expenses for the firm increased 44% to ₹3,807.1 crore in the quarter ended March, up from ₹2,636.8 crore a year ago and ₹4,071.3 crore a quarter ago.
As reported by The Hindu BusinessLine, Meesho's net merchandise value (NMV) for Q4 increased 43% year-on-year to ₹11,371 crore, reflecting stronger traction among repeat users and higher purchase frequency. Order volumes also rose at a similar pace, with placed orders growing 717 million during the quarter. For the full fiscal year FY26, Meesho's NMV stood at ₹41,560 crore, marking a 39% year-on-year increase. The company attributed this growth to a combination of new user additions, habit formation and increased purchase frequency across its platform. Over 264 million Indians transacted on the platform in the last twelve months, up 33% year-on-year, while total orders rose 45% to 2.67 billion. The platform also saw significant seller growth, with around 961,000 sellers selling products on Meesho, up 87% year-on-year. Average order frequency improved to 10.1 transactions per user during the year, demonstrating increased user engagement and platform stickiness.
According to Meesho's cofounder and CEO Vidit Aatrey in his shareholder letter, the company is undergoing a significant transformation through artificial intelligence adoption. "Over 75% of our orders now come from personalised feeds, while tools like voice-based shopping and address recognition are helping first-time users transact online," Aatrey wrote. "Over 70% of our code is now AI-generated. Platform experiments up 2x YoY." Despite this AI integration, the company hasn't seen meaningful savings in people costs, instead deploying AI tools to grow productivity with the same amount of resources. The company continues to invest heavily in growth, with every rupee of growth investment showing up in the P&L in the quarter it is spent even though economic returns accrue over many years. Profitability metrics improved sequentially, with contribution margin recovering to 4.0% of NMV and adjusted EBITDA for the marketplace segment improving by 245 basis points quarter-on-quarter to -1.7% of NMV, supported by lower logistics costs and operating leverage. Meesho stepped up investments in artificial intelligence and machine learning capabilities, alongside expanding its engineering talent base during FY26, with people costs not directly linked to order volumes remaining stable as a percentage of NMV despite a 33% increase in absolute terms.
According to The Hindu BusinessLine, Meesho reported that temporary cost inefficiencies seen during the second and third quarters—arising from consolidation within the third-party logistics (3PL) ecosystem—are now easing. "Interim nodes built for disruption absorption were decommissioned," the company said, indicating a return to more stable logistics operations. Looking ahead, the company flagged an uncertain macroeconomic environment, driven by geopolitical developments and pressure on input costs and consumer sentiment. "The macro environment heading into FY27 is more uncertain than it has been in a while. Geopolitical developments and the resulting pressure on input costs and consumer sentiment are still playing out, and we don't pretend to know how deep or how long any of it runs," the company stated. In a separate development, the board approved further investment of up to ₹100 crore in its subsidiary, Meesho Payments Private Limited, through one or more tranches via a rights or further issue of capital. The payments arm reported a turnover of ₹1,104.65 lakh and a net loss of ₹2,471.67 lakh, underscoring continued investments in building out financial services capabilities alongside the core commerce business.
On May 6, Meesho's shares on BSE closed 3.77% lower at ₹196.50 apiece despite the strong quarterly results. The market reaction suggests investor concerns about the company's continued losses and high growth investments, even as revenue growth remains robust. India's ecommerce market remains significantly underpenetrated, with only around 30% of smartphone users shopping online versus over 80% in markets like China and Southeast Asia, as noted by CEO Vidit Aatrey. The company believes that AI is accelerating this shift and is building technology to enable market expansion as accessibility improves.
