Morgan Stanley Initiates Coverage of Meesho with ‘Equal-Weight’ Rating
Morgan Stanley has initiated coverage of Meesho with an ‘Equal-Weight’ rating and a price target of Rs 169 per share, representing a roughly 3% upside from current levels. the brokerage cites full valuations following the stock’s strong post-listing performance, while acknowledging Meesho’s critically important scale and potential in the value e-commerce segment. However, they anticipate a few years before the company achieves steady-state profitability due to the early stage of monetization in its advertising business and continued focus on user expansion.
Meesho’s Strengths: scale and a Unique Position
Since its inception in 2015, Meesho has rapidly grown to become a significant player in the value e-commerce space in india.As of September 2025, the platform boasts approximately 234 million annual transacting users and over 700,000 sellers, with an average order value around US$3. Key strengths highlighted by Morgan Stanley include:
- Significant Scale: Meesho has established a substantial user base and seller network.
- Wide Product Assortment: The platform offers a vast selection of products, with nearly 153.72 million daily active listings.
- Personalized Recommendations: A hyper-personalized product feed drives a significant portion of orders (74.57% generated through feeds or recommendations).
- Asset-Light Model: Meesho’s marketplace model supports strong capital efficiency.
- Limited Competition: The brokerage believes Meesho faces relatively limited direct competition within its specific value commerce segment.
- Proven Business Model: Meesho’s approach mirrors successful global platforms like PDD in China and Shopee in Southeast Asia.
morgan Stanley views Meesho as a compelling thematic play on India’s growing consumption story, with strong moats established in the value commerce segment.
Financial projections and Growth Expectations
Morgan Stanley forecasts Meesho to be among the fastest-growing players in India’s goods retailing sector. Their projections include:
- Net Merchandise Value (NMV) Growth: A 26% compound annual growth rate (CAGR) over FY26-FY28.
- Adjusted EBITDA Margins: Improvement from -3.2% in FY26 to 0.5% by FY28, with a long-term steady-state margin of around 3.8% of NMV by FY31.
Currently, meesho is trading at 1.14x FY28 EV to NMV,which Morgan Stanley considers fair given the expected steady-state margin of 3.8% of NMV. This is slightly below Blinkit’s estimated multiple of around 1.4x.
Bull and Bear Cases: Potential Upside and Downside Risks
Bull Case Scenario
Morgan Stanley outlines a bullish scenario where faster-than-expected monetization of advertising revenues doesn’t hinder growth. In this case, the stock could re-rate to over 40x FY31 estimated adjusted EV to EBITDA, aligning with Blinkit’s target multiple. This could translate to a one-year forward value of Rs 239,representing a potential upside of approximately 45% from current levels.
Downside Risks
The brokerage also identifies potential downside risks:
- Widening Losses: Adjusted EBITDA losses are expected to increase in the second half of FY26 compared to the first half.
- Monetization Delays: Slower-than-anticipated monetization of advertising revenues could delay the company’s path to profitability.
Stock Performance and IPO Context
Meesho shares have traded substantially above their initial public offering (IPO) price. As of early 2026, the stock is up approximately 46% from its IPO price of Rs 111, although it has experienced a 36% decline from its post-listing peak of Rs 254. Year-to-date (2026), the stock is down around 8%.
The company’s IPO debuted on December 10th, listing at a 46% premium and closing the first session near Rs 170.
key Takeaways
- Meesho is a rapidly growing player in the value e-commerce segment in India.
- Morgan Stanley initiated coverage with an ‘Equal-Weight’ rating and a price target of Rs 169.
- Valuations are currently considered full, with profitability expected a few years out.
- Faster monetization of advertising is a key catalyst for potential upside.
- Slower monetization and widening losses represent key downside risks.
Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of The Economic Times.