Value commerce platform Meesho cut its net loss by 68% to Rs 132.4 crore in the second quarter of FY27, with revenue growing 34% to Rs 4,131.6 crore. While user and seller numbers rose, the firm reported increased operational expenses due to heavy infrastructure investments for the festive season.
Value commerce platform Meesho reported a significant improvement in its financial performance for the second quarter of FY27, with net losses narrowing to Rs 132.4 crore from Rs 411.4 crore in the same period last year. This 68% reduction in losses comes alongside a 34% rise in revenue, which reached Rs 4,131.6 crore. The growth reflects the company’s ongoing focus on scaling its user base in tier-2 and smaller towns, which remain its primary target market.
A key driver of the platform's recent expenditure has been a major upgrade in technology infrastructure. The company increased its spending on artificial intelligence and server capacity, specifically doubling its GPU footprint to support expected traffic during the peak festive sales window. By choosing to reserve this computing capacity in advance rather than relying on auto-scaling alternatives, the firm aimed to ensure 99.99% platform availability. While this strategy prioritizes technical stability, it contributed to a 24% rise in total operational expenses, which hit Rs 4,382.3 crore for the quarter.
Operational metrics for the quarter showed steady growth, with Net Merchandise Value increasing by 23% to Rs 12,911 crore. The platform facilitated 819 million orders, a 17% increase compared to the previous year. Additionally, the company saw strong engagement growth, with annual transacting users reaching 284 million, a 21% rise. The seller base also expanded significantly, growing by 60% to 1.13 million. The company noted that the shifting timeline of its Mega Blockbuster Sale, which moved from the second quarter last year to the third quarter this year, influenced these financial results.
The broader e-commerce sector continues to experience intense pressure from the rise of quick commerce and competitive pricing strategies from incumbents like Flipkart and Amazon. While Meesho has maintained its foothold in the value segment, investors are closely watching the balance between high infrastructure spending and the path to sustained profitability. The increase in server costs, which rose to 2.3% of the Net Merchandise Value compared to 1.9% in the prior quarter, underscores the cost involved in maintaining large-scale digital platforms during high-demand periods.
Following the release of these results, the company's share price reportedly fell by 1.77% to Rs 227.6. The key monitorable for the coming quarters will be how efficiently the company manages these heightened operational costs as it faces evolving market competition. Future performance updates will likely focus on the impact of the festive season sales and whether the recent investments in computing infrastructure result in improved platform efficiency and sustained user retention.