The Indian stock market witnessed a spectacular rally on Wednesday, December 17, as shares of Meesho Ltd locked in at the 20 percent upper circuit. By 2:44 PM IST, the stock was trading at a high of ₹216, registering a gain of 19.99 percent. This surge pushed the company’s market capitalisation to an impressive ₹97,642 crore.
Since its initial public offering (IPO), the e-commerce giant has been on an unstoppable run. The stock has soared approximately 95 percent from its issue price of ₹111, delivering massive returns to investors in just a week. The latest trigger for this rally is a bullish report from international brokerage UBS, which suggests that the company’s growth story is only beginning.
Here is a simple breakdown of why UBS is betting big on Meesho and what makes this stock the talk of Dalal Street.
The UBS Bull Case: 4 Key Growth Drivers
UBS has initiated a ‘buy’ call on Meesho, citing its unique business model and ability to capture India’s massive tier 2 and 3 consumer base. The brokerage believes the company is well positioned for long term profitability.
- Asset-Light and Cash Positive: Unlike many internet companies that burn cash on heavy inventory, Meesho operates on an asset-light model. UBS highlighted that the company runs on negative working capital, which supports sustainable cash flow generation. This financial structure sets it apart from competitors and ensures efficiency as it scales.
- Massive Revenue Growth (30% CAGR): The brokerage projects that Meesho’s Net Merchandise Value (NMV) will grow at a compound annual growth rate (CAGR) of 30 percent between FY25 and FY30. This growth will be fuelled by its dominance in the lower to middle income consumer segment, where adoption is accelerating rapidly.
- User Base to Double: UBS estimates a sharp rise in Active Transacting Users (ATUs). The user count is expected to jump from 199 million (19.9 crore) currently to a staggering 518 million (51.8 crore) by FY30.
- Higher Order Frequency: While the Average Order Value (AOV) may dip from ₹274 to ₹233 due to logistics efficiencies being passed on to customers, volume will compensate for value. UBS sees order frequency improving significantly from 9.2x to 14.7x by FY30.
(Source:Moneycontrol, Livemint)
Profitability Roadmap
Financial discipline remains core to the UBS outlook. The report forecasts:
- Contribution Margin: Reaching 6.8 percent of NMV (Net Merchandise Value) by FY30.
- Adjusted EBITDA Margin: Hitting 3.2 percent of NMV by FY30.
What Domestic Analysts Say
While foreign brokerages are bullish, domestic experts offer a balanced view. Utsav Verma, Head of Research at Choice Institutional Equities, noted that their base case target of ₹200 implies limited immediate upside. However, their bull case valuation of ₹234 accounts for stronger execution and faster monetisation.
(Source:Moneycontrol, Livemint)
A Bumper Market Debut
Meesho Ltd. made headlines on December 10 with a stellar listing.
- IPO Price: ₹111 per-share.
- Listing Price: ₹162.50 on NSE (46 percent premium).
- Subscription: The ₹5,421 crore IPO was subscribed 79.02 times, signalling massive demand.
The company plans to use the IPO proceeds of ₹4,250 crore (fresh issue) to upgrade its cloud infrastructure, boost marketing, and explore acquisitions.
(Source:Moneycontrol, Livemint)
Dominating Discovery Commerce
Meesho Ltd. has cemented its status as one of India’s largest e-commerce platforms by order volume. In the six months ending September 30, 2025, the platform hosted 153.72 million daily active product listings. A key strength is its discovery led model, with 73.18 percent of orders coming from personalised feeds rather than search bars.
(Source:Moneycontrol, Livemint)
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