Meesho expects stronger Q3 growth due to change in festive sale timeline

Synopsis

The first day of Meesho's annual flagship sale, the Mega Blockbuster Sale, saw orders growing about 75% YoY. Its transacting customers increased by about 60% YoY.

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Value ecommerce platform Meesho reported a 34% year-on-year (YoY) increase in operating revenue to Rs 4,131 crore in the July-September quarter of FY27, while its net loss narrowed 68% to Rs 132 crore.

The company's results were broadly in line with brokerage estimates, which pegged revenue at Rs 4,064-4,130 crore and net loss at Rs 127-155 crore.

While the improvement in the bottomline was partly aided by a higher tax outgo in the second quarter of FY26, Meesho also recorded better operating performance this year. Its adjusted Ebitda loss narrowed to Rs 172 crore in the July-September quarter, from Rs 380 crore in the year-ago period.

The contraction in operating losses came as its contribution margin, measured as a percentage of net merchandise value (NMV), improved to 6% from 3.3% a year ago. Contribution refers to income earned after deducting direct, order-linked expenses. The improvement in contribution margin offset higher spending on advertising and promotions, as well as server deployment in preparation for the festive season.

Meesho's NMV rose 23% YoY to Rs 12,911 crore in the July-September quarter, while its annual transacting user base continued to expand.

“More consumers are shopping on Meesho, and they are shopping more frequently, even as first-time buyers grew 16% quarter-on-quarter. This momentum extended into the festive season, with NMV growing 33% year-on-year on a festive-aligned basis, reinforcing our conviction in the depth of India's ecommerce opportunity,” cofounder and CEO Vidit Aatrey said.

"Overall, from FY27 versus FY26 perspective, there's continued to be significant improvement in contribution margin. The way we think about it is that we will restore some of the lost logistics-related spread that we had in FY26 back to where it was in FY25 period during the course of this year," said Dhiresh Bansal, CFO, Meesho, during the analyst call.

Meesho shares closed at Rs 227.60 apiece on Wednesday, up 1.8% on the BSE.

Q3 outlook

Meesho expects year-on-year growth in the December quarter to appear stronger than the underlying trend because of a shift in the timing of its festive sale. The company, however, remains watchful of macroeconomic pressures, it said in its shareholder letter accompanying the Q2 results.

“We remain watchful of the macro environment. The geopolitical conflict has lasted longer than most expected, leading to a surge in raw material and fuel prices, and household budgets remain under pressure,” the company said.

However, it added that customer participation remained strong during the festive season, with shoppers spending on categories beyond essential goods, indicating that demand was holding up.

“Q3 YoY growth will also look stronger than the underlying trend because of the sale shift,” Meesho said, adding that the initial traction during its festive sale gave it confidence in the outlook for consumer demand in India despite broader economic uncertainties.

The first day of Meesho's annual flagship event, the Mega Blockbuster Sale, on October 9 saw orders grow about 75% YoY, driven by strong festive demand. The number of transacting customers increased about 60% YoY on the day.

Meesho also said spending on growth initiatives would remain elevated through the festive sale period and the weeks around Diwali, in line with its usual seasonal pattern. Add as a Reliable and Trusted News Source Add Now!

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