Shares of Indian e-commerce platform Meesho experienced a notable decline on Friday, September 25, 2026, plummeting 7% following a new 'reduce' rating from brokerage firm Nomura. The rating suggests a cautious outlook for the company's stock, which Nomura believes trades at a substantial premium compared to its peers.
Nomura's analysis highlighted several key concerns. The brokerage anticipates heightened competition from established horizontal platforms like Amazon and Flipkart, which are expected to intensify their presence in value commerce. Furthermore, Nomura foresees an increasing overlap with the quick commerce segment, a development that could exert pressure on Meesho's profit margins.
Brokerage Insights and Market Performance
Despite projecting a robust 23% Net Merchandise Value (NMV) Compound Annual Growth Rate (CAGR) for Meesho between FY27 and FY30, driven by continued adoption, Nomura's 'reduce' call underscores the potential headwinds from market dynamics. The stock closed 6.87% lower at Rs 216.85 on the BSE, bringing the firm's market capitalization down to Rs 96,451 crore.
In contrast to Nomura's recent downgrade, global brokerage UBS had previously raised its price target for Meesho stock by 24% on October 22. UBS cited stronger expectations for both revenue expansion and margin improvement, revising its medium-term growth estimates upwards. While its FY27 estimates remained largely unchanged, UBS increased its FY29-FY31 net merchandise value forecasts by 7-18% and its EBITDA projections for the same period by 20-40%.
Q1 Financial Overview
For the first quarter of the current fiscal year, Meesho reported a significant improvement in its financial performance, with a 54% year-on-year (YoY) reduction in its net loss. The loss narrowed to Rs 132.8 crore, a considerable improvement from Rs 289.4 crore reported in the same quarter a year prior. The company had posted a loss of Rs 166.3 crore in the preceding quarter.
Revenue from operations for the Bengaluru-based firm surged by 48% YoY, reaching Rs 3,712.8 crore, up from Rs 2,503.9 crore in the year-ago period. This also marked an increase from Rs 3,531.2 crore in the previous quarter. Total expenses, however, also saw an increase of 43%, rising to Rs 3,959.2 crore for the quarter ending June, compared to Rs 2,777.6 crore a year ago and Rs 3,807.1 crore in the prior quarter.