The Indian e-commerce industry is growing rapidly with rising internet and smartphone penetration. The ease of making payments and growing aspirations of Indian consumers, especially Gen Z, is also driving growth. At the centre of this industry is Meesho, which got listed in December 2025.
Global brokerage house Nomura has initiated coverage on the stock with a “Reduce” rating and a target price of Rs 167 a piece, nearly 24% below the current price.
Nomura on Meesho: Good business model but trades at premium
Meesho is a direct play on the fast-growing online value commerce in the country and is expected to clock a 23% compounded annual growth rate in net merchandise value by FY30 over FY27. However, it trades at a “significant” premium to other platforms such as Eternal and Swiggy, Nomura said.
Meesho caters to around 90% of overall online shoppers in India. It is a two-sided marketplace that connects value-conscious, mass-market consumers with a long-tail of small and medium enterprises and monetises through advertisement and fulfilment services rather than commission. Meesho, unlike most other platforms, has an “asset-light” business model where it does not own the inventory or fulfilment assets.
“Its key USP is its industry-low fulfilment cost leveraging its in-house Valmo platform (with ~18k logistics partners). Meesho’s use of AI to improve user experience has been a key driver behind its rapid user growth,” Nomura said. The brokerage expects Meesho’s adjusted EBITDA margin to rise to 2.9% by FY30 from -1.2% in the first quarter of FY27. This will be driven by a potential increase in advertising revenue to 5% of net merchandise value by FY30 from 3% in Q1 FY27. Growth in logistics spreads to 2.8% of net merchandise value over the same period will also aid margins.
Meesho: Nomura lists competition risks
“While Meesho has an early-mover advantage, we think both Amazon and Flipkart will try to increase their presence in QC and VC as these segments are growing faster than overall ecommerce,” Nomura said.
The brokerage added that the recent relaunch of Shopsy by Flipkart with a gamified approach focusing on Gen Z and higher user engagement is a step in this direction. “We also think an overlap with the QC industry could rise (particularly in metros) in the future as the former continues to broaden its offerings toward non-grocery segments and expand its geographic presence, though Meesho is unlikely to invest into dark stores,” Nomura said.
Nomura said key risks include faster-than-expected user additions, lower-than-2% annual decline in AOV, higher-than-expected advertising margins, and lower competitive intensity.
Conclusion
Meesho has a good asset-light business model, which Nomura prefers. However, its current share price leaves little room for error. Third-party logistics disruptions and intensifying competition could create headwinds on margin improvement. Meesho also trades at a premium to Eternal and Swiggy, despite their higher net merchandise value growth and cash-cow food delivery businesses.
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