Meesho bets on logistics fixes, operating leverage to lift margins after Q3 loss widens

Bengaluru: Net loss of e-commerce marketplace Meesho Ltd ₹490 crore in the December quarter ₹37 crore in the same quarter last year as increased spending on logistics and technology increased costs.

The company’s revenue from operations increased by 31% ₹3,517 crore, while expenditure increased to 3,517 crore ₹4,071 crore ₹2,822 crore in the same period of the previous year.

The Bengaluru-based company expanded its logistics network under Valmo, which led to temporary inefficiencies such as underutilized routes, backup nodes and longer delivery distances. In a letter to shareholders on Friday, Meesho said a one-time restructuring cost this quarter reduced its contribution margin by 2.3%.

Contribution margin is a measurement that nets out variable costs from revenues and indicates a company’s ability to generate cash.

“Contribution margin was at 2.3% due to accelerated growth of Valmo after 3PL [third-party logistics] industry consolidation. This is expected to normalize in the coming quarters,” Meesho said.

Reducing cost per order

The company added that the market is working to eliminate redundant nodes, improve delivery routes and increase throughput on newly scaled nodes in the fourth quarter, which is expected to reduce cost per order.

Meesho’s net market value (NMV), which is the cumulative payment value of orders successfully delivered in the market, including all taxes, increased by 26% year-on-year. ₹10,995 crore. The transacting user base reached 251 million in the latest quarter, compared to 187 million in the same quarter last year.

Meesho, which announced its first quarterly figures since its IPO on Friday, has a huge impact across India, especially in World War II. It operates an e-commerce marketplace that connects small sellers in urban areas and smaller with value-conscious consumers.

The company now plans to accelerate investments in advertising and sales promotion to support new user onboarding, as well as expand its non-tech capabilities, content commerce and branded products vertical Meesho Mall in Valmo in FY26.

“We expect a significant improvement in adjusted EBITDA margin over the next two quarters to return to Q1 FY26 levels, driven by the recovery of logistics costs and operating leverage on user growth and technology investments made in FY26,” the platform said in a statement.