Buy Meeshos; target of Rs 265: Choice Institutional Equities

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • Meesho's strong NMV growth of 22.8% YoY is driven by increasing user engagement, with Annual Transacting Users (ATU) scaling up to 284 Mn and Annual Transacting sellers to 1.1 Mn.
  • Improving logistics efficiency, with a 15% YoY improvement in delivery speeds, is expected to drive long-term platform growth.
  • Emerging monetisation levers, such as advertising and Meesho Mall, are expected to contribute to revenue growth.
  • The company's focus on customer trust and pricing discipline, with a policy against charging platform fees, handling fees, or convenience fees, is expected to drive user retention and acquisition.

Thesis Validation Checklist

  • Investors should watch for sustained NMV growth, driven by increasing user engagement and emerging monetisation levers.
  • Improving logistics efficiency, with continued reduction in delivery times and costs, is expected to drive long-term platform growth.
  • The success of emerging initiatives, such as Meesho Mall and advertising monetisation, will be critical to driving revenue growth.
  • The company's ability to maintain its pricing discipline and customer trust will be essential to driving user retention and acquisition.