The markets continue to be volatile and if you are looking at possible options to bet on, a recently listed new-age e-commerce play is in focus. This is after, Axis Capital initiated coverage on Meesho with a ‘Buy’ rating. It has set a target price of Rs 195. This translates to a potential upside of around 34% from current levels.
What is driving this optimism? Let’s take a look at the key reasons –
Axis Capital on Meesho: A bet on India’s value e-commerce
One of the core reasons behind the positive view is Meesho’s positioning in India’s value-commerce segment.
According to the Axis Capital report, “Meesho is best placed to capture India’s structurally underpenetrated value-commerce opportunity, driven by non-electronics categories and Tier-2+ demand.”
The brokerage house in its report highlighted that affordability remains the key driver in these regions, and Meesho’s business model is built around exactly that.
Axis Capital on Meesho: Scale advantage and limited competition
Another factor working in Meesho’s favour is its strong market position.
As per the brokerage firm report, “It is the clear leader in value commerce and faces little competition in the space.”
While players like Amazon (through Bazaar) and Flipkart (through Shopsy) are present, the report suggests that replicating Meesho’s model is not easy.
“Its 25%+ share of industry shipments reflects unmatched scale in low-AOV, high-frequency transactions driven by its affordability flywheel,” the brokerage noted.
Axis Capital on Meesho: Growth visibility remains strong
The brokerage has also highlighted that concerns around market saturation may be overstated.
According to the report, concerns about the market getting saturated may be overdone.
Axis Capital i its report noted that Meesho still has strong growth potential, with a possible path to around 440 million active users by FY30.
The report also pointed to global companies like Mercado Libre and Pinduoduo, which have continued to grow even after reaching a large scale, showing that such expansion is possible.
Axis Capital on Meesho: Ads and operating leverage to drive profitability
Beyond growth, the focus is also shifting to profitability. According to the report, “Meesho’s robust demand-side traction feeds into the ad-monetization flywheel, positioning ads as a key margin driver.”
Axis Capital on Meesho: Strong growth outlook over the next few years
Looking ahead, the brokerage remains optimistic about the company’s growth trajectory.
The brokerage house in its report noted, “We expect Meesho’s marketplace value and revenue to grow at around 29% and 25% annually between FY26 and FY30, with profit margins (adjusted EBITDA) reaching around 3% by FY30.”
This growth is expected to be supported by increasing internet penetration, rising adoption in smaller cities, and a steady expansion in seller base. The asset-light model and negative working capital cycle are also seen as positives, as they support free cash flow generation.
Axis Capital on Meesho: What could be the risks?
Axis Capital outlook remains positive, however, it has also flagged certain risks.
These include “(1) Lower growth in ATU and seller; (2) logistics costs not declining as expected; and (3) lower-than-expected improvement in ad monetization.”
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.