The stock ended today’s trading session at INR 157.05 on the BSE, down 4.99% from the previous close
This is when the company’s loss widened 13X to INR 490.7 Cr in the December quarter (Q3 FY26) from INR 37.4 Cr in the year ago period
Ecommerce major Meesho’s shares continued to slide for the second straight session today after the company reported a sharp widening of losses in Q3 FY26 on Friday.
The stock ended today’s trading session at INR 157.05 on the BSE, down 4.99% from the previous close.
The company’s loss widened 13X to INR 490.7 Cr in the December quarter (Q3 FY26) from INR 37.4 Cr in the year ago period. Its operating revenue however, grew 31% YoY and 14% QoQ to INR 3,517.6 Cr
The widening losses were largely driven by the scale-up of its in-house logistics arm, Valmo, undertaken to offset the void created by the Ecom Express acquisition.
In its earnings call, the company’s management noted that a “large 3PL partner” abruptly exited the business around May-June of FY26, which led to the immediate and material loss of delivery capacity.
“This came at a particularly sensitive time, just three to four months ahead of the festive season, when order volumes rise sharply and customer expectations on delivery reliability are at their highest,” Meesho’s CFO Dhiresh Bansal said.
For context, logistics major Delhivery initiated the acquisition deal of competitor Ecom Express for INR 1,407 Cr ($164.5 Mn) in April 2025. The merger was cleared by the CCI in June.
Ecom Express, once a major logistics partner for Meesho, faced a significant business decline after Meesho reduced its dependence, launching its own logistics unit Valm) in 2024. As per Ecom Express’ DRHP, the company made 52% of its revenue from a single customer, which is most likely to be Meesho.
With Ecom out of the equation, Meesho faced the choice to either scale back deliveries and risk damaging user trust, or rapidly rebuild capacity even if it meant accepting significantly higher costs.
While Meesho tried to build the replacement capacity via Valmo, it also had to enter into short term and higher priced contracts with other unnamed logistics partners.
As the resulting emergency expansion was executed under tight timelines, it left not much of a room for optimisation. Several nodes were added or expanded quickly, lanes were activated without ideal density, and contracts were signed at unfavourable rates because of the urgency.
Bansal said that the capacity was never designed to be cost-efficient, but rather to prevent delivery failures during a critical period.
As a result, per-order logistics costs rose sharply, dragging down contribution margins. At the same time, the share of insourced logistics declined marginally, as the company tried to balance Valmo and third-party usage to keep operations running at the lowest possible cost under constrained conditions, rather than forcing volume through inefficient internal nodes.
Beyond logistics, higher people and growth investments also added to the cost burden. In its bid to strengthen AI and machine learning capabilities, Meesho ramped up hiring, with employee benefit expenses rising 19% YoY to INR 235.2 Cr.
Advertising and sales promotion spend also increased as the company stepped up investments in brand-building, traffic acquisition and customer incentives, with such expenses rising to 2.4% of NMV from 1.3% a year earlier.
Curated by Aisha Patel
