Meesho shares closed 1.6% lower at ₹236.37 on Wednesday, down from Tuesday's close of ₹240.19, following a significant block deal transaction. The decline came as 3.86 crore shares changed hands in a block deal worth ₹899.71 crore on the BSE, with shares dropping to an intraday low of ₹230.94 apiece on the NSE in morning trade. This transaction marked the second major liquidity event for the stock this month, following SoftBank's previous offloading of its stake for ₹1,650 crore. RPS WOS II LLC, led by ex-Softbank managing partner Kabir Misra, sold ₹899.7 crore, marking 0.84% of its stake in the deal, while the Government of Singapore and Mirae Asset Mutual Fund were the two biggest buyers, purchasing ₹307.5 crore and ₹179.9 crore, respectively. The block deal occurred just a day after a UBS report gave the fashion retailer a 'Buy' rating, highlighting the volatility in the stock's recent performance.
Meesho reported a YoY adjusted loss of ₹132.84 crore in Q1 FY27, narrowing from a loss of ₹215.92 crore in Q1 FY26 and ₹166.35 crore in Q4 FY26. The company's revenue from operations increased 48.3% YoY and 5.1% QoQ to ₹3,712.81 crore in the quarter ended June 30, 2026, driven by improved delivery conversion through lower cancellations, Return-to-Origin (RTO) rates and higher platform monetisation. Net sales increased 48.3% YoY and 5.1% QoQ to ₹3,712.81 crore, while Net Merchandise Value (NMV) registered a yearly growth of 34% to ₹11,614 crore, supported by continued expansion in its user base and higher engagement levels on the platform. Marketplace revenue from operations increased 48% YoY to ₹3,707 crore, with Contribution margin expanding to 4.6% of NMV, up 54 basis points sequentially, driven by logistics efficiencies and better monetisation. Marketplace Adjusted EBITDA improved to negative 1.2% of NMV, reflecting an improvement in marketplace economics.
The latest block deal attracted significant participation from global institutional investors, with Goldman Sachs Bank Europe acquiring 12 lakh shares and Morgan Stanley Asia Singapore purchasing 10.73 lakh shares. Other major buyers included Citigroup Global Markets Singapore (15.50 lakh shares), BNP Paribas Arbitrage (20.50 lakh shares), Fidelity Advisor Series VIII-Fidelity Advisor Overseas Fund, Citigroup Global Markets Singapore, Norges Bank on Account of Government Petroleum Fund, Ghisallo Master Fund, NRSGVCC, WhiteOak Capital Mutual Fund, Bajaj Life Insurance, and Edelweiss Mutual Fund. The Government of Singapore was the largest buyer, acquiring 1.32 crore shares for approximately ₹307.53 crore, while Mirae Asset Mutual Fund purchased 77.21 lakh shares for approximately ₹179.9 crore and Societe Generale acquired 35.50 lakh shares for around ₹82.72 crore. As of June 2026, RPS WOS II LLC held a 1.18% stake in Meesho, with promoters holding 16.41% and public shareholders accounting for 83.59% of the company's equity.
According to the latest UBS report, Meesho's focus on value commerce in a low-income yet digitally savvy market like India opens a sizeable growth opportunity. The bank projects Meesho's net merchandise value (NMV) to grow at a 28% compound annual growth rate (CAGR) from FY26 to FY31, benefiting from an expanding user base of 592 million by FY31 versus 264 million in FY26 and increased order frequency from 10 to 16. Advertising revenue is projected to reach 5-6% of NMV by FY30, with the bank estimating a contribution margin of 6.2% and adjusted EBITDA margin of 2.3% by FY30. The management sees this as a significant long-term opportunity, with Meesho leveraging its data for underwriting and collections support and potentially monetizing it over time through a first default loss guarantee (FLDG)-type model. Advertising contribution margin stood at 3.1% of NMV in Q1FY27, with management noting that sellers are willing to increase ad spending by 2.5x to 3x, meaning seller budgets are not the bottleneck.
As reported by CNBC TV18 and The Economic Times, contribution margins are expected to reach 5.5% in the next 12 months and 8.5% by FY31, driven by logistics margin expansion and higher ad-monetisation. The management targets a 15-25% reduction in logistics costs over the next five years, driven by a higher prepaid mix, self-pickup initiatives, sort centre automation and increasing scale of Valmo. Logistics cost per parcel declined from ₹44 in Q3FY26 to ₹42 in Q1FY27, with UBS expecting this cost to continue declining, allowing Meesho to gradually rebuild its logistics margin from around 1.5% to 2.5% over the next two to three quarters. Last-twelve-months (LTM) free cash flow improved by around 15% to negative ₹537 crore from negative ₹633 crore in the previous quarter. As of June 30, 2026, Meesho had a cash balance of ₹6,521 crore. Contribution margin improved sharply from 2.3% in Q3FY26 to 4.6% in Q1FY27, with UBS expecting it to reach around 5% by the end of FY27 and 5.6% by the end of FY28.
Kunal Bajaj, research analyst at Choice Institutional Equities, noted that while the block deals may create some near-term supply overhang, they are secondary transactions and do not alter the fundamental outlook on Meesho, which continues to benefit from user-led scaleup, an expanding seller ecosystem, logistics efficiencies, and monetisation of ad revenues. The higher NMV forecasts reflect the continued flywheel from sellers and buyers, coupled with rapid expansion in SKUs and logistics partners, supporting the company's ambitious growth trajectory. CLSA maintained its 'Underperform' rating and target price of ₹150 apiece, saying that the stock already reflects overly optimistic expectations for advertising revenue, order growth and logistics savings. The higher NMV forecasts reflect the continued flywheel from sellers and buyers, coupled with rapid expansion in SKUs and logistics partners, supporting the company's ambitious growth trajectory. While logistics margin expansion can bring Meesho to EBITDA breakeven, scaling ad monetization will be the key driver of actual profitability and further upside for the stock.
