Meesho shares jump 14% in weak market; what is fuelling the sharp rally?

The stock jumped as much as 13.86% to ₹196.62 on the NSE in the intraday session.

The buying interest in the stock in a weak market could be attributed to the latest report on the company by the international financial services firm JP Morgan.

Details to know

JPMorgan has initiated coverage on Meesho with a positive stance, citing strong growth visibility and multiple monetisation levers.

The investment firm expects Meesho’s net merchandise value (NMV) growth to outpace user growth, driven by improving engagement and higher spend per user.

It also highlighted that the platform’s advertising business remains under-monetised, offering significant upside through three levers as the company scales.

• an increase in the number of paying sellers (JPMorgan estimates approximately 60% currently);
• higher monetisation per paying seller (current spend is below 50% of ad budget); and
• growth in the Mall and branded goods.

Earnings before interest, tax, depreciation and amortisation (EBITDA) margins are expected to expand to 4% by FY31, driven primarily by this ad take-rate expansion.

When analysts say a platform’s advertising business is "under-monetised", they mean the company is not yet earning as much ad revenue as it potentially could from its traffic and user base.

JPMorgan noted that the recent pullback in logistics costs should be treated as a one-off rather than a structural trend, indicating that margins could normalise going forward.

At the same time, analysts at JP Morgan see additional optionality from monetising premium users, which could further support revenue growth.

On the profitability front, JPMorgan expects free cash flow (FCF) to recover faster than EBITDA, reflecting improving unit economics and tighter cost control.

Overall, the financial services firm remains constructive on Meesho’s outlook, driven by strong NMV growth potential, untapped monetisation opportunities, and improving profitability metrics.

About Meesho Limited

Meesho operates a multi-sided technology platform that drives e-commerce adoption across India, particularly in value-focused segments. The company runs its core marketplace under the Meesho brand, connecting consumers, sellers, logistics partners, and content creators.

Its operations are broadly divided into two segments:

• Marketplace: The core platform enabling the buying and selling of products across categories

• New Initiatives: Includes a low-cost local logistics network for daily essentials and a digital financial services platform.

Meesho’s platform is designed to make e-commerce affordable, accessible, and engaging, with a strong focus on Everyday Low Prices (EDLP) to cater to price-sensitive consumers across India.

The company offers a wide range of products spanning categories such as apparel, footwear, accessories, home and kitchen, furnishings, beauty and personal care, and kids’ products.

Its catalogue includes offerings like women’s and men’s western wear, ethnic wear, accessories, footwear, and baby's and kids’ fashion, among others.