Meesho Shares Trade Flat After Q2 Results Show Narrowed Losses and 23% NMV Growth

Meesho Limited shares traded down 0.5% on Thursday following its Q2 FY27 earnings report, which showed a significant narrowing of net losses and a 23% growth in Net Merchandise Value. Market analysts remain divided on the company's valuation, balancing logistics-driven margin expansion against high valuation multiples and planned reinvestments.

Shares of e-commerce company Meesho Limited were trading at ₹226.70 on Thursday afternoon, marking a 0.50 per cent decline from Wednesday’s close of ₹227.84. The stock movement followed the release of the company's Q2 FY27 earnings on October 28, which highlighted a strong narrowing of net losses.

The stock opened sharply lower at ₹222 during Thursday's session before recovering to a day’s high of ₹232.50. Market activity showed heavy selling pressure, with 77 per cent of pending orders on the sell side compared to 23 per cent on the buy side. By early afternoon, approximately 89 lakh shares had changed hands, representing a total value of ₹203 crore. Year-to-date, the stock has gained nearly 25 per cent, though it remains below its 52-week high of ₹254.40 reached in December 2025.

Financially, Meesho reported a substantial narrowing of net losses by approximately 68 per cent year-on-year to ₹132 crore. Net Merchandise Value (NMV) grew by 23 per cent to reach ₹12,911 crore. When adjusted for the Mega Blockbuster Sale shifting to Q3 this year on a festival-aligned basis, NMV growth stood at 33 per cent. Additionally, quarterly free cash flow turned positive at ₹345 crore, aided by seasonal working capital. The company closed the quarter with a cash balance of ₹7,048 crore as of September 30.

Despite the improved financial metrics, analyst opinions regarding the stock's valuation remain sharply divided. Motilal Oswal and Choice Institutional both maintained a Buy rating with a target price of ₹265. These brokerages highlighted logistics-driven margin expansion and a long-term growth runway as key supports. Elara Securities retained an Accumulate rating with a target of ₹270, noting that sustained profitability improvements rather than temporary efficiency gains will drive future re-rating.

Conversely, JM Financial issued a lone Sell call with a target price of ₹185. The brokerage argued that the stock trades at 60 times its FY29 adjusted EBITDA estimate, placing it among the richest multiples in internet sector coverage and leaving minimal margin for execution errors.

The divergence in analyst outlooks is partly driven by Meesho’s own guidance. The company cautioned that the 6 per cent contribution margin recorded in Q2 may not be sustained in the upcoming quarters, as it intends to reinvest logistics savings into consumer and seller subsidies ahead of the festive season.

"Meesho's Q2 results clearly demonstrate that the company is on a steady path toward improving operational efficiency, highlighted by positive free cash flows and significantly reduced losses. However, the market's cautious reaction and mixed analyst ratings underline a classic growth-versus-valuation dilemma. When a company trades at rich multiples, investors look for consistency in profitability rather than temporary margin gains. Meesho's strategy to reinvest savings into subsidies for the festive season is a logical growth move, but it understandably introduces near-term margin volatility that markets will watch closely." — Dr. Shishir Gupta, Founder & CEO, StartupLanes