Buy Meesho; target of Rs 200: Choice Institutional Equities

Choice Institutional Equities's report on Meesho

India’s retail market is set to scale from INR 83Tn in FY25 to INR 123–135Tn by FY30E (8–10% CAGR), yet per-capita consumption is only 15–20% of China’s, indicating a long formalisation runway. Organised retail penetration should rise from 21% to ~33%, shifting USD 470–540Bn to formal channels; e-commerce will capture most of this at 20–25% GMV CAGR. Key categories remain deeply underpenetrated online i.e. Fashion & BPC Home essentials and Grocery—with more than 75% unbranded supply favouring value-led e-commerce models. Meesho is best placed to monetise this shift via its zero-commission, low-AOV, discovery-led platform serving Tier-2/3 users. Long-tail depth, content-led demand and logistics integration enable superior unit economics, with rising ad/fintech/fulfilment monetisation makes Meesho the most leveraged play on the next 100–150Mn mass-market users.

Outlook

We initiate coverage on Meesho with a BUY rating and a TP of INR 200 (81.7% upside), valuing the company at 4x FY28E EV/Revenue, with a threestage DCF performed purely as a sanity check. Meesho remains in the high-growth phase of the platform lifecycle and is expected to deliver 31% FY25–28E revenue CAGR, supported by deep value-commerce penetration and logistics efficiencies as Valmo scales.