CLSA sets Meesho target at Rs 150, forecasting 29% downside despite recent rally
Meesho shares rose nearly 19% this year to cross the Rs 210 mark. Equity research firm CLSA downgraded its outlook and set a new valuation of Rs 150.
Meesho shares increased by 18.76% through mid-year 2026, exceeding the performance of the Nifty 500 index which has fallen 3.90% in the same period. The current closing price stood at Rs 210.30. CLSA maintained its Underperform rating and lowered its target price to Rs 150. This valuation implies a 29% decline from the stock's previous close. The brokerage argued that investor expectations regarding advertising revenue, order frequency, and logistics savings remain too optimistic. Market participants expect Meesho's advertising revenue to equal approximately 5% of net merchandise value by fiscal year 30. CLSA estimated this figure at 3.9%. The firm noted that investors assume a take rate around 5%, yet Meesho already operates with a take rate of 17.8%, exceeding that of Chinese peer PDD. Furthermore, Meesho sellers generate significantly less merchandise value than average PDD sellers. CLSA also highlighted concerns regarding order frequency growth potential.
