Meesho on track for profitability by FY27, says Choice Institutional Equities

India’s value-focused e-commerce story is gaining momentum, and Meesho appears well-positioned to lead the next phase.

In a conversation with CNBC-TV18, Utsav Verma, Head of Research at Choice Institutional Equities, explained why the firm expects Meesho to turn earnings before interest, taxes, depreciation, and amortisation (EBITDA) positive by FY27 and why the stock still offers upside even after a strong listing.

Verma said Meesho’s path to profitability is supported by improving unit economics, scale benefits, and strong category leadership. The company commands nearly 29% of India’s e-commerce order volumes, a share expected to rise to 31%.

Meesho continues to consolidate its position in fashion, home, kidswear and beauty & personal care (BPC), while benefiting from declining customer acquisition costs. Contribution margins have steadily improved—from 2.9% in FY23 to 5% in FY25, and could reach 5.8% going forward.

According to Verma, factors like logistics leverage, fulfilment cost optimisation, and stable take rates of 30–31% strengthen visibility around profitability. “We are confident Meesho is firmly on track to achieve positive EBITDA by FY27,” he said.

Even after a sharp debut pop, Verma believes the valuation is not stretched. Choice Institutional Equities has a target price of ₹200, implying meaningful upside from the IPO price.

He added that Meesho also compares favourably on cash-flow metrics versus peers at the time of their listing.

Looking ahead, Verma sees value e-commerce as the next big growth engine for India. As organised retail rises from 21% to 34% in the next four to five years, a large part of the opportunity—worth nearly $500 billion—will be captured online. The next 150–200 million shoppers will come primarily from tier-2 and tier-3 cities, where Meesho already has deep consumer and seller penetration.

“Meesho is in a Goldilocks spot,” Verma said, supported by strong tech capabilities and a business model aligned with India’s mass-market consumption wave.

For the entire discussion, watch the accompanying video

Follow our real-time, tick-by-tick coverage of all IPO listing updates here.

Note To Readers

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.