Meesho shares can rally to Rs 240? Why Motilal Oswal initiated coverage on the platform stock

Motilal Oswal has initiated coverage with a ‘Buy’ rating on e-commerce platform Meesho, with a target price of Rs 240. The brokerage believes that the company can generate free cash flow starting FY27 and can reach over 4% of net merchandise value (NMV) by FY31.

The brokerage stated that Meesho’s valuations are highly sensitive to NMV growth and contribution margin expansion. At the current market price, the stock is pricing in 25% NMV CAGR over FY26-31, similar to the brokerage’s estimates, and a 6.7% contribution margin (CM) by FY31.