{"id":27275,"date":"2026-06-06T17:26:10","date_gmt":"2026-06-06T11:56:10","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=27275"},"modified":"2026-06-06T17:26:10","modified_gmt":"2026-06-06T11:56:10","slug":"macquarie-sees-25pct-downside-in-meesho","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/macquarie-sees-25pct-downside-in-meesho\/","title":{"rendered":"Macquarie Initiates Underperform on Meesho, Sees 25% Downside"},"content":{"rendered":"
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Brokerage flags AOV decline and weak per-order economics as structural profit barriers despite 45% order volume surge in FY26<\/em><\/p>\n

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The Bear Call<\/strong><\/h2>\n

Global brokerage Macquarie<\/a> on Friday initiated coverage on Meesho<\/a> (NSE: MEESHO) with an ‘Underperform’ rating and a target price of Rs 125 per share, implying a downside of nearly 25% from the stock’s current trading range of Rs 166\u2013169 on NSE. The call makes Macquarie the most bearish institutional voice on the newly listed e-commerce platform, sitting well outside a broader analyst consensus that remains constructive on the stock.<\/p>\n

Macquarie’s core thesis: strong order volume growth is being neutralised by declining average order values, leaving per-order economics too thin to support a credible path to profitability at current valuations.<\/p>\n

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Why Macquarie Is Worried: The AOV Problem<\/strong><\/h2>\n

The numbers are already moving in the direction Macquarie fears. Meesho’s full-year FY26 average order value (AOV) came in at Rs 265, down 3% from Rs 274 in FY25. This isn’t a forecast anymore. It’s happened.<\/p>\n

Key FY26 operating metrics vs FY25:<\/strong><\/h3>\n
\n\n\n\n\n\n\n\n\n\n
Metric<\/th>\nFY25<\/th>\nFY26<\/th>\nChange<\/th>\n<\/tr>\n<\/thead>\n
Average Order Value (AOV)<\/td>\nRs 274<\/td>\nRs 265<\/td>\n\u25bc 3% YoY<\/td>\n<\/tr>\n
Annual Transacting Users (ATU)<\/td>\n199 million<\/td>\n264 million<\/td>\n\u25b2 33% YoY<\/td>\n<\/tr>\n
Placed Orders<\/td>\n1,834 million<\/td>\n2,668 million<\/td>\n\u25b2 45% YoY<\/td>\n<\/tr>\n
Net Merchandise Value (NMV)<\/td>\nRs 29,988 Cr<\/td>\nRs 41,560 Cr<\/td>\n\u25b2 39% YoY<\/td>\n<\/tr>\n
Order Frequency (LTM)<\/td>\n9.23x<\/td>\n10.1x<\/td>\n\u25b2 9% YoY<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

The platform is scaling. But each order is worth less. And at Meesho’s thin take rates, even a Rs 9 drop in AOV per order matters at 2.6 billion orders a year.<\/p>\n

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Financials: Losses Narrowing, But Not Fast Enough<\/strong><\/h2>\n

Meesho’s Q4 FY26 and full-year results, announced May 6, 2026, showed continued progress on losses, but the bottom line remains firmly in the red.<\/p>\n

Meesho P&L snapshot:<\/strong><\/h3>\n
\n\n\n\n\n\n\n\n\n
Period<\/th>\nRevenue (Ops)<\/th>\nNet Loss<\/th>\nYoY Change (Loss)<\/th>\n<\/tr>\n<\/thead>\n
Q4 FY25<\/td>\nRs 2,399.97 Cr<\/td>\nRs 1,391.38 Cr<\/td>\n\u2014<\/td>\n<\/tr>\n
Q4 FY26<\/td>\nRs 3,531.21 Cr<\/td>\nRs 166.35 Cr<\/td>\n\u25bc 88% improvement<\/td>\n<\/tr>\n
FY25 Full Year<\/td>\nRs 9,389.90 Cr<\/td>\nRs 3,941.71 Cr<\/td>\n\u2014<\/td>\n<\/tr>\n
FY26 Full Year<\/td>\nRs 12,626.35 Cr<\/td>\nRs 1,357.74 Cr<\/td>\n\u25bc 66% improvement<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Revenue growth at 34.5% YoY for FY26 is solid. The loss reduction looks dramatic, but most of FY25’s losses included one-time exceptional items from the IPO restructuring. Strip those out, and the core operational loss trajectory is less impressive than the headline numbers suggest. Contribution margin in Q4 FY26 recovered to 4.0% of NMV, up from distressed levels, but adjusted EBITDA (marketplace) is still negative at -1.7% of NMV.<\/p>\n

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The Valuation Gap Macquarie Is Targeting<\/strong><\/h2>\n

At ~Rs 167, Meesho’s market cap sits around Rs 76,868 crore. The stock was listed at Rs 162.50 on NSE on December 10, 2025, a 46.4% premium over its IPO price of Rs 111, and hit a 52-week high of Rs 254.40 before sliding back. It is now trading 34% below that peak.<\/p>\n

Where analysts stand (as of May\u2013June 2026):<\/strong><\/h3>\n
\n\n\n\n\n\n\n\n\n\n
Broker<\/th>\nRating<\/th>\nTarget Price<\/th>\n<\/tr>\n<\/thead>\n
Macquarie<\/td>\nUnderperform<\/td>\nRs 125<\/td>\n<\/tr>\n
UBS<\/td>\nBuy<\/td>\nRs 220<\/td>\n<\/tr>\n
Analyst Consensus (10 brokers)<\/td>\nBuy<\/td>\nRs 204.10<\/td>\n<\/tr>\n
52-Week Low<\/td>\n\u2014<\/td>\nRs 125.56<\/td>\n<\/tr>\n
52-Week High<\/td>\n\u2014<\/td>\nRs 254.40<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Macquarie’s Rs 125 target almost exactly coincides with the stock’s 52-week floor of Rs 125.56, meaning the brokerage is pricing in a scenario where the post-IPO support level fully gives way.<\/p>\n

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The Hidden Risk: Cash-on-Delivery Still Dominates<\/strong><\/h2>\n

What doesn’t get enough attention in Meesho coverage is its payment mix. CoD accounted for 72% of total shipped orders in H1 FY26 (period ending September 2025) \u2014 down from 88.71% in FY23, but still the dominant mode.<\/p>\n

CoD trend across years:<\/strong><\/h3>\n
\n\n\n\n\n\n\n\n\n
Period<\/th>\nCash-on-Delivery Share<\/th>\n<\/tr>\n<\/thead>\n
FY23<\/td>\n88.71%<\/td>\n<\/tr>\n
FY24<\/td>\n85.39%<\/td>\n<\/tr>\n
FY25<\/td>\n76.95%<\/td>\n<\/tr>\n
H1 FY26<\/td>\n72.00%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

CoD orders carry higher return rates, lower delivery success, and additional cash-handling costs compared to prepaid. At 72% of a 2.6-billion-order annual run rate, this is a structural drag on per-order profitability that every bull-case model has to account for. The improvement is real, but the absolute level remains the highest among major Indian e-commerce platforms.<\/p>\n

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Bull vs Bear: What Both Sides Are Watching<\/strong><\/h2>\n