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Tax Demand Sends Meesho Shares to Record Low
Meesho's shares experienced heavy selling pressure Monday, reaching a record low and hitting the 10% lower circuit on the BSE. The sharp decline followed the company's announcement of receiving an Assessment Order and Demand Notice from the Income Tax Department. The notice pertains to ₹1,499.73 crore, plus applicable interest, for the Assessment Year 2023-24.
The e-commerce firm informed exchanges that it is reviewing the order but disputes its adjustments. Meesho indicated it possesses strong legal and factual grounds to challenge the demand and is taking measures to safeguard its interests. Notably, a similar tax demand for the previous assessment year (2022-23) is currently under an interim stay from the Karnataka High Court.
Meesho assured investors that the current tax demand is not expected to significantly affect its financial position or operations. Separately, the company reported its Q3FY26 financial results, showing a net loss of ₹490.7 crore. This is a substantial increase from the ₹37.4 crore loss in the same period last year. Despite the wider loss, revenue from operations grew 32% year-on-year to ₹3,517.6 crore.
Looking ahead, Meesho's management anticipates a significant improvement in Adjusted EBITDA margins in the next two quarters, driven by logistics cost recovery and operational leverage from user growth. Analysts at JM Financial Institutional Securities commented on Meesho's strong position in Indian e-commerce and logistics. They noted potential risks such as intense competition and plateauing logistics costs, alongside upsides from new revenue streams.