Meesho's Surprising 110% Rally: Should You Invest in This E-commerce Stock Now?

Meesho, a recently listed e-commerce company, has seen its share price soar by 110% from its initial public offering (IPO) price of ₹111, reaching a record high of ₹233.50. This surge has left investors wondering if they should still buy into the stock.

Meesho's Spectacular Post-Listing Rally

The company's stellar performance came after global brokerage UBS initiated coverage with a 'Buy' rating and a ₹220 price target, implying nearly 10% upside from the stock's intraday peak. This call added fresh momentum to Meesho's already impressive market debut.

Meesho made a strong debut on the stock market, beginning trading at a 46% premium to its issue price. The stock has continued to rise, with a 41% gain over the past four trading sessions.

Caution Ahead: Should You Still Invest?

Despite the impressive rally, some analysts are urging caution. Harshal Dasani, Business Head at INVAsset, notes that Meesho's rally has shifted focus from listing euphoria to a deeper valuation debate. He emphasizes that the company is still transitioning toward consistent profitability and that investor confidence reflects long-term opportunity rather than near-term earnings visibility.

Dasani's Key Points:

• Meesho's current valuation leaves limited room for error.
• Sustaining elevated levels will require tangible progress on unit economics, operating leverage, and competitive intensity management.
• The company must demonstrate quarterly discipline and transparency to justify its market valuation.

Analyst Targets and Expectations

Utsav Verma, Head of Research at Choice Institutional Equities, has set a base-case target price of ₹200, implying limited near-term upside from current levels. However, the bull-case valuation of ₹234 reflects stronger-than-expected improvements in monetization, operating leverage, and execution on the path to profitability.

UBS expects Meesho's Net Merchandise Value (NMV) to grow at a 30% CAGR between FY25 and FY30, with Annual Transacting Users (ATUs) projected to rise sharply from 199 million to 518 million.

Disclaimer

Remember, this is a perspective, not a prediction. It's essential to do your own research and consult with certified experts before making any investment decisions. The views and recommendations made above are those of individual analysts or broking companies and may not reflect the opinions of all market experts.