Citigroup has started tracking e-commerce platform Meesho with a 'Buy' rating, setting a price target of Rs 210. The brokerage highlights the company’s expansion in smaller cities and strong revenue growth as key positives. Since Meesho is a private company, its shares are available through unlisted market platforms rather than major stock exchanges like the NSE or BSE.
What Happened
Global brokerage firm Citigroup has initiated coverage on Meesho, the e-commerce platform, assigning a 'Buy' rating with a price target of Rs 210. This target suggests a potential upside of approximately 23% from current trading levels in the unlisted market. As Meesho is currently a private company, these shares are not traded on public stock exchanges like the NSE or BSE, but are instead available through platforms that facilitate trading in unlisted securities.
The Business Case
Citigroup’s positive outlook on Meesho is driven by the company’s ability to grow its user base outside of major metropolitan cities. The brokerage noted that the company has achieved a large scale, with over 264 million annual transacting users and nearly a million sellers on its platform. A key part of the investment thesis is the company's low-cost business model, which helps it capture demand in price-sensitive regions.
Analysts at Citigroup expect advertising revenue to be the main driver for the company's future profitability. They project a 27% compound annual growth rate in Net Monetized Volume (NMV)—a measure of transaction value—between FY26 and FY29. While the company is growing, the brokerage expects average order values to decline slightly, which is common as platforms penetrate deeper into smaller, more value-conscious markets.
Financial Performance
Meesho has shown signs of improving financial health. In its fourth-quarter results for FY26, the company reported a consolidated net loss of Rs 166.34 crore, a significant reduction from the loss of Rs 1,391.38 crore recorded in the same quarter the previous year. Revenue from operations also increased, rising 47.13% to Rs 3,531.21 crore during the quarter.
For the full fiscal year 2025-26, the company's consolidated net loss narrowed to Rs 1,357.73 crore, down from Rs 3,941.70 crore in FY25. Annual revenue for the same period grew by 34.4% to reach Rs 12,626.34 crore. The brokerage projects that adjusted EBITDA margins could reach 2.1% by FY29, moving toward 3.6% by FY30.
Key Risks to Consider
While the outlook is positive, investors should be aware of specific business risks. Citigroup highlighted that the successful scaling of 'Valmo', the company's internal logistics unit, is a critical factor for the business. Any issues in the ramp-up of this logistics network could impact operations. Furthermore, the company relies heavily on its advertising technology to drive profits. If the performance of this ad-tech platform does not meet expectations, it could pressure overall margins.
What Investors Should Monitor
Since this is an unlisted entity, investors interested in Meesho should focus on the company's path to consistent profitability. Key areas to watch include the actual improvement in EBITDA margins, the adoption of advertising tools by sellers, and the efficiency of the Valmo logistics network. Additionally, the company’s ability to defend its market share against larger e-commerce rivals while maintaining a low-cost structure will remain a vital monitorable for long-term growth.