Meesho shares jump 7%, is this the right time to invest or will you get caught?
Meesho shares have rocketed after impressive quarterly results. Earnings rose 47% and losses narrowed, sending the stock soaring 7%. However, amid the celebrations, brokerage firm HSBC has set a new target price of ₹185. This is significantly below the current price, signaling a significant warning for investors.
Today was a very eventful day for investors of e-commerce giant Meesho. As soon as the market released its impressive financial results for the quarter ending March 2026, the company's shares rocketed to a record high.
On one hand, the company's earnings recorded a massive 47 percent jump, while on the other, losses also narrowed significantly.
This double joy directly impacted the stock market, and Meesho's stock jumped by more than 7 percent. However, amid this rapid rally, a report by stock market experts and brokerage firms has also warned investors to exercise some caution.
There is a bumper increase in earnings, then where is the problem?
The March 2026 quarter numbers brought significant relief to Meesho. The company's operating revenue grew at a rapid pace of 47.1% year-on-year, reaching over ₹3,531.2 crore. The best part is that its net loss has narrowed from ₹1,391 crore to just ₹166.3 crore.
Term Plan for Self-Employed from ₹630/month
However, a nuance is important to understand here. In the same quarter last year, the company incurred an exceptional loss of ₹1,285 crore.
Adjusting that figure, the company's losses have actually increased on an annual basis. Furthermore, its operating loss has also increased from ₹230.8 crore to ₹254.72 crore.
What are the margin and cash flow figures saying?
The health of any company is determined by its cash flow and margins. In Meesho's case, the contribution margin for the March 2026 quarter was 4%. This figure is better than the previous few quarters. It was 2.3% in the December 2025 quarter and 3.3% in September.
However, it is still slightly lower than the 4.4% in June 2025. Of concern is the company's free cash flow. Trailing free cash flow for the last 12 months has fallen from a profit of ₹591 crore to a loss (negative) of ₹633 crore on an annual basis.
Why are brokerage firms putting a brake on this flight of shares?
During intraday trading, Meesho's stock jumped 7.56 percent to ₹211.35 and later traded at ₹201.55, up 2.57 percent on the BSE. Meanwhile, renowned brokerage firm HSBC released its report. The firm maintained a "hold" rating on Meesho's stock.
While they have raised the target price from Rs 160 to Rs 185, this new target is significantly below the current market price of the stock (above Rs 200). Therefore, it is being considered a warning signal for investors.
HSBC believes that prepaid orders and improved logistics systems will benefit the company in the future. They expect the company to become free cash flow positive by FY2027, driven by a large scale business and advertising revenue, and to significantly improve profits.
How has been the journey of investors from listing till now?
If we look at Meesho's stock market journey so far, it has been quite interesting. The company launched a massive IPO of Rs 5,421 crore, issuing shares to investors at a price of Rs 111.
Meesho made a spectacular entry into the domestic stock market on December 10, 2025. After listing at a hefty premium of 46%, within just two days, on December 12, 2025, the stock touched an all-time high of Rs 254.65.