Meesho Q1 FY27 Results (NSE: MEESHO)
Signal: Steady quarter
The read
Reported net profit of ₹803 Cr is a dramatic turnaround from prior quarters' losses, but this is almost entirely due to ₹520 Cr of other income (interest on cash). Core operating EBITDA is positive at 14.4% of revenue, yet the company's own marketplace adjusted EBITDA (a more conservative measure of the platform's economics) remains negative at -1.2% of NMV. The key positive is the sustained improvement in unit economics: contribution margin expanded to 4.6% of NMV, NMV growth of 34% YoY, and user metrics (ATU +29%, orders +29%) remain strong. The cash balance provides a buffer, but the dependence on investment income for profitability is a concern. The inflection in operating leverage is real, but still early.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,707 Cr | 48.0% | 5.0% |
| EBIT | ₹338 Cr | 63.3% | |
| Net profit | ₹803 Cr | 53.5% | |
| EPS | ₹3.29 | 48.2% | |
| EBIT margin | 14.35% |
P&L walk
Revenue grew 48% YoY to ₹3,707 Cr, driven by order growth (+29% YoY) and improved platform monetisation. Operating EBITDA (revenue less employee and other expenses) was ₹532 Cr (14.4% margin), up from ₹347 Cr (13.9% margin) last year, a slight margin expansion of 50bps. The net profit of ₹803 Cr was significantly boosted by other income of ₹520 Cr (interest on cash), which accounted for 65% of pre-tax profit. Core marketplace adjusted EBITDA (per press release) remains negative at -1.2% of NMV, but unit economics are improving as contribution margin reached 4.6% of NMV.
Key positives
- Revenue growth of 48% YoY, driven by 29% increase in placed orders and improved platform monetisation.
- NMV grew 34% YoY to ₹11,614 Cr, with contribution margin expanding to 4.6% of NMV (up 54bps QoQ).
- Annual Transacting Users reached 274 million (+29% YoY) and purchase frequency improved to 10.3x per year.
- Annual Transacting Sellers surged 81% YoY to 1.04 million, with strong growth in Tier 4 towns.
- Cash balance of ₹6,521 Cr provides significant strategic flexibility.
Key concerns
- Net profit of ₹803 Cr is heavily reliant on other income (₹520 Cr); core marketplace adjusted EBITDA still negative at -1.2% of NMV.
- LTM Free Cash Flow remains negative at (₹537 Cr), though improving from (₹633 Cr) prior quarter.
- Other expenses grew 51% YoY, slightly outpacing revenue growth, partly due to fuel and minimum wage cost pressures.
- EPS growth (48.2%) lags PAT growth (53.5%) due to ESOP dilution.
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