Macquarie Initiates 'Underperform' Rating On Meesho, Sees 25% Downside. Here's Why

Macquarie Downgrades Meesho to 'Underperform' with Target Price of Rs 125

Macquarie has launched its coverage of Meesho, assigning the company an ‘Underperform’ rating alongside a target price of Rs 125, suggesting a potential decline of approximately 25%. The brokerage expresses concerns over decreasing average order values and limited profitability, which could hinder the company’s financial performance.

Despite Meesho's impressive user growth and enhancements in engagement metrics, Macquarie highlights that these factors may not be sufficient to offset the challenges posed by modest per-order economics. Additionally, the firm's commitment to free cash flow is noted, but it may not suffice to boost profitability in the current market landscape.