Meesho Slides 40% from Peak, Slips Below Listing Price; Here’s Why Brokers Still See 26% Upside

Meesho, the Indian e-commerce platform, has seen its share price fall sharply since its record highs, slipping below its initial listing level and sliding about 40% from recent peak levels. This move has frustrated many investors who bought the stock early, yet some major brokers remain optimistic, forecasting further upside potential. The current situation highlights the balance between short-term market challenges and longer-term growth prospects for the company.

After listing on Indian stock exchanges in December 2025, Meesho shares surged strongly, making the stock one of the best-performing large IPOs of the year. At its post-IPO peak, the stock climbed to around ₹254, which was roughly 95% above its issue price, and it briefly delivered substantial gains to early investors.

However, in early 2026, the share price had reversed course. The stock has fallen to around ₹150–₹155, taking it below its ₹162 listing price and marking approximately a 40% drop from peak levels. This correction has occurred alongside broader market volatility and company-specific performance issues.

Why Meesho’s Share Price Has Dropped

One major reason for the slide in Meesho shares is its latest quarterly earnings report. The company reported a sharp widening of net losses in the December quarter. Consolidated net losses surged nearly 13-fold from around ₹37 crore in the year-ago period to approximately ₹491 crore. This significant increase in losses raised concerns among investors about profitability and financial sustainability.

Despite strong growth in revenue, which rose about 32% year-on-year to roughly ₹3,518 crore, the widening losses overshadowed top-line progress. Rising expenses related to advertising, marketing, and logistics contributed to margin pressures. Many investors were especially worried because the firm had been spending heavily on customer acquisition and broad expansion, which weighed on short-term profitability.

Another factor has been technical and market dynamics. The expiry of IPO lock-in periods enabled early investors and institutional holders to sell shares, adding supply in the market. When large blocks of stock become available for trading after lock-in expiry, selling pressure can increase and push prices lower.

Positive Views from Brokers

Even though the short-term price action has disappointed many shareholders, leading brokerages still see potential for Meesho to grow over time. Swiss brokerage UBS has maintained a Buy rating on the stock and set a target price around ₹220. This target implies an approximately 26% upside from current levels, suggesting confidence that the stock may rebound as operational challenges ease and profitability improves.

UBS points out that some of the margin pressures seen in recent quarters were due to one-off factors. For example, a merger between two large third-party logistics (3PL) providers temporarily limited Meesho’s logistics capacity. In response, the company temporarily expanded its in-house logistics arm, Valmo, which increased costs in the short term. UBS expects these inefficiencies to normalise over the next two quarters, which may help restore margins and support earnings.

Bank of America (BofA) Securities has taken a more cautious stance, but still sees potential upside of around 9%. The U.S. broker believes that Meesho will balance its logistics strategy between its own network and 3PL partners in a cost-efficient way, which should help reduce total logistics costs over time. BofA also sees growth driven by an expanding base of annual transacting users rather than increased transaction frequency, which could support future revenue.

Underlying Growth Drivers

Despite the recent price volatility, Meesho still has fundamental growth drivers that appeal to many investors and brokers. One of the core strengths of the business is its expanding user base. Meesho is one of India’s largest e-commerce platforms in terms of annual transacting users and order volumes, which reflects strong engagement and market penetration.

Revenue growth has remained solid even as profitability has lagged. Meesho’s revenue printed above ₹3,500 crore in the latest quarter and has continued to grow quarter-on-quarter. The company’s ability to attract new buyers and sellers and drive more orders can support longer-term growth potential if costs are controlled efficiently.

Additionally, the company is investing in technology, cloud systems, and operational infrastructure to enhance efficiency. Strategic allocation of IPO proceeds into areas like technology and logistics can help improve margins and user experience over time. Some investors conducting stock research may see this as a positive sign that Meesho is building scalable capabilities for future growth.

There is also optimism around longer-term monetisation from advertising and other value-added services. The company expects higher ad revenue margins in the future as it leverages its large app user base and seller ecosystem.

Risks and Challenges Ahead

Even with potential upside, several risks remain for Meesho and its investors. One ongoing concern is the timing and pace at which the company can achieve profitability. Frequent spending on customer acquisition and logistics expansion has kept losses elevated, and investors may remain cautious until margins show consistent improvement.

Competition in the Indian e-commerce space is another challenge. Meesho operates in a market dominated by major players with deep financial resources, such as Amazon and Flipkart. These giants can outspend smaller rivals in marketing and logistics, which could pressure Meesho’s market share and unit economics if not managed well.

Market sentiment around high-growth, loss-making internet companies can also be volatile. Valuations of tech and e-commerce stocks, including those influenced by AI stock themes or broader digital commerce narratives, can swing widely based on earnings results, guidance, or macroeconomic conditions. Investors focused on the stock market need to weigh both growth potential and risk dynamics when evaluating Meesho.

What This Means for Investors

For long-term investors, the current dip in Meesho shares could present a potential buying opportunity if one believes in the company’s growth strategy and future profitability. The case for holding or accumulating shares would rest on expectations that costs will normalise, user engagement will continue to expand, and revenue growth will remain robust.

Short-term traders or risk-averse investors might be cautious, especially given the recent volatility and wider losses. Monitoring quarterly earnings, margin trends, and operational updates from management will be essential for informed decisions. Investors conducting stock research should also compare Meesho’s performance and valuation against peers in the digital commerce sector to assess relative opportunities.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.