Meesho Shares Locked In Upper Circuit After UBS Initiation
Shares of Meesho are buzzing in trade on Wednesday, rising more than 9% after an initiation from UBS, which has put out a positive note on the counter. The stock is currently trading at Rs 196, which accounts for gains of almost 9% compared to Tuesday’s closing price of Rs 180.
The stock has now locked in an upper circuit, with the price rising to Rs 216, accounting for gains of 20% compared to Tuesday’s closing price of Rs 180.
UBS Initiation and Target Price
The positive sentiment in Meesho comes as UBS initiated coverage on the counter with a ‘buy’ rating and a target price of Rs 220. The brokerage firm has highlighted how Meesho has democratised online shopping in villages and rural areas of India.
UBS predicts a large growth runway for Meesho for a period ranging up to FY30, with a visible path to profit and cash generation. Furthermore, UBS sees contribution margin and adjusted Ebitda margin reaching 6.8% and 3.2% by FY30, effectively meaning that the road ahead for Meesho remains strong.
Meesho’s Founder Becomes a Billionaire
Sentiment around Meesho has also been aided by its founder, Vidit Aatrey, becoming a billionaire thanks to the solid upmove the stock has shown since listing. Shares of Meesho got listed on Dec. 10 at Rs 161, with a solid premium of 45%. Since then, the stock has gained more than 20%. Compared to the issue price of Rs 111, the stock has moved over 75%.
Aatrey, who owns 11.1% stake in Meesho, is currently valued at over Rs 9,000 crore, thanks to Meesho’s impressive stock performance since listing. Despite the solid upmove, however, shares of Meesho are currently trading at a relative strength index of 75, which suggests the stock could be in a overbought territory.
Indian E-Commerce Market Outlook
The Indian e-commerce market is expected to continue growing, driven by increasing internet penetration, a growing middle class, and a rise in online shopping. Meesho, with its focus on online shopping in rural areas, is well-positioned to benefit from this trend.
Investors looking to invest in the Indian e-commerce market can consider Meesho, as well as other players such as Flipkart and Amazon India. However, it’s essential to do your own research and consider your investment goals and risk tolerance before making any investment decisions.
Conclusion
In conclusion, Meesho shares are buzzing in trade after UBS initiated coverage with a ‘buy’ rating and a target price of Rs 220. The company’s focus on democratising online shopping in rural areas, its large growth runway, and its visible path to profit and cash generation make it an attractive investment opportunity. However, investors should be cautious of the stock’s current overbought territory and consider their investment goals and risk tolerance before making any investment decisions.