Axis Capital has initiated a 'Buy' rating on Meesho with a target price of ₹195, implying a 34% upside from current levels. According to reports from The Economic Times and The Hindu BusinessLine, the optimism stems from the belief that the e-commerce company is well placed to benefit from the sector's growth, driven by rising penetration in tier-2 and smaller cities. The brokerage highlighted that Meesho shares rallied 5% today, hitting the day's high of ₹147.39 on the NSE, with the December-listed stock up 32% over its IPO price of ₹111, though it remains 42% below its peak of ₹254. The target price is valued at 4x EV/Sales (FY28E), in line with B2C internet peers.
As reported by The Economic Times and The Hindu BusinessLine, Meesho, as India's largest e-commerce player with 250 million ATUs (Annual Transacting Users), is best placed to benefit given its market leadership in unbranded and long-tail categories. The brokerage argues that India's five-year e-commerce growth of 20% CAGR will be led by rising penetration in tier-2 and smaller cities, where affordability is key. Meesho's strategy to drive the affordability flywheel by passing cost efficiencies—especially in logistics—to sellers, allowing them to offer affordable products, helps increase user penetration and order frequency. The company is expected to deliver 29% NMV CAGR between FY26 and FY30E, while rising ad contribution could drive 25% revenue CAGR.
According to The Economic Times and The Hindu BusinessLine, the company is expected to benefit significantly from ad monetisation. With 9 lakh sellers, a focus on unbranded assortments leading to clean attribution, high order frequency, and a discovery-led platform, advertising could become an important margin lever for the company. Axis sees ads scaling from 3% of Net Merchandise Value (NMV) to 6% by FY30E. The brokerage's analysis shows the Total Addressable Market (TAM) at 580 million (58 crore) users by FY30E across rural and urban India, where Meesho could capture 8% of spending in its categories.
As reported by The Economic Times and The Hindu BusinessLine, Axis' checks revealed that Meesho is 31–37% cheaper on a 19-product basket costing ₹1,600. The brokerage believes Amazon Bazaar and Shopsy are structurally constrained by seller base, catalogue, and fulfilment economics inherited from higher average selling price (ASP) models. Adjusted EBITDA margins are projected to expand to 3.1% by FY30E, rising 620 basis points on operating leverage. The company's asset-light model and negative working capital cycle support free cash flow generation, while the rising ad percentage would lead to 25% revenue CAGR.
