In its first quarterly earnings report since its successful market debut, Meesho reported a consolidated net loss of ₹490.7 crore for the quarter ended December 31, 2025 (Q3 FY26).
This represents a 13-fold increase (approximately 1,224%) from the ₹37.4 crore loss recorded in the same period last year. Despite the wider deficit, the company saw strong top-line growth and maintains a robust cash position following its December 2025 IPO.
1. Q3 FY26 Financial Snapshot
While profitability took a hit, Meesho’s scale continued to expand across its value-focused marketplace.
| Metric | Q3 FY25 (Year Ago) | Q3 FY26 (Current) | Change (YoY) |
| Operating Revenue | ₹2,674 Crore | ₹3,517 Crore | ↑ 31% |
| Net Loss | ₹37.4 Crore | ₹490.7 Crore | ↑ 1,212% |
| Total Expenses | ₹2,823 Crore | ₹4,071 Crore | ↑ 44% |
| NMV (Net Merchandise Value) | ₹8,730 Crore | ₹10,995 Crore | ↑ 26% |
2. Why Did Losses Surge? The “Valmo” Factor
The dramatic widening of losses was primarily attributed to temporary operational inefficiencies and strategic growth investments:
- Logistics Expansion: Meesho rapidly scaled its in-house logistics network, Valmo, which now handles 60% of its business. This rapid ramp-up led to “redundant nodes” and under-utilized delivery routes, impacting contribution margins by about 1 percentage point.
- Festive Advertising: The company doubled its investment in advertising and sales promotion to 2.4% of NMV (up from 1.3% last year) to capture the festive season demand.
- Absorbing Costs: Rather than passing higher logistics costs to consumers during the festive season, Meesho chose to absorb them to protect long-term user retention.
- Talent Acquisition: Employee benefit expenses rose 20% to ₹235 crore as the firm added engineering and AI talent to improve its discovery and voice search tools.
3. Operational Metrics: Reaching New Highs
Despite the bottom-line pressure, Meesho’s user engagement metrics remain industry-leading:
- Annual Transacting Users (ATU): Reached 251 million, a 34% increase YoY.
- Order Volume: The platform processed 690 million orders in Q3, up 35% YoY.
- Transaction Frequency: Users averaged 9.78 transactions annually, up from 8.98 last year.
- Seller Growth: Active sellers on the platform grew 81% YoY to 8.46 lakh.
4. Post-IPO Cash Position
Meesho enters 2026 with a significant capital “moat” following its December 10, 2025, listing:
- Cash Balance: ₹7,277 crore, bolstered by the ₹4,088 crore raised in the IPO.
- Free Cash Flow (FCF): LTM (Last Twelve Months) free cash flow remained positive at ₹56 crore.
- Market Cap: As of January 30, 2026, Meesho’s market capitalization stood at approximately ₹78,000 crore ($8.5 billion), with shares trading at ₹173 (a 56% premium over the ₹111 issue price).
Conclusion: Choosing “Flywheel Health” Over Optics
CEO Vidit Aatrey described the quarter as a conscious choice between “near-term financial optimization and long-term flywheel health.” By investing heavily in Valmo and user acquisition now, Meesho is betting on building a compounding leadership position in India’s value-e-commerce segment. The management expects logistics costs to normalize and margins to recover to earlier levels within the next two quarters as the network is optimized.
