Meesho Ltd (MEESHO) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Meesho Q2 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask question after the introduction. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Navin Killa from UBS. Thank you, and over to you, Navin.
Navin Killa (UBS): Thank you. On behalf of UBS, I would like to welcome all the participants to the Q2 FY27 conference call for Meesho Limited. I would like to inform you that the call is being recorded, and the audio call and the transcript will be available on the company's website. Joining us today to discuss earnings for Q2 FY27 are Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer; Sanjeev Kumar, Full-time Director and Chief Technology Officer; Dhiresh Bansal, Chief Financial Officer; and Kartik Chandrasekhar, Head - Corporate Development and Investor Relations. We encourage investors and analysts to review the shareholder letter, which is available on Meesho's Investor Relations website. During the call, therefore, management will focus on answering questions beyond the topics that are already covered in the letter. Before we begin, do note that certain statements made on this call may be forward-looking in nature and should therefore be considered in conjunction with the risk factors disclosed in the company's filings. With that, I think we can open the floor for questions. Moderator, I'll pass it back to you.
Moderator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press "*" and "1" on their touchtone telephone. If you wish to remove yourself from the question queue, you may press "*" and "2". Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Vivek M with Jefferies. Please go ahead.
Vivek M (Jefferies): Hi, good evening Meesho team. First on the contribution margins, you know, this quarter 6% is a great number. You have, you know, cautioned not to not to extrapolate this for the rest of the year. But from a second half perspective, where do you think this number can you know, should settle at and and also you know, if you can you know, comment on FY28 as well?
Dhiresh Bansal (Meesho Ltd): Sure. Thanks, Vivek. Dheeraj here. So, I think from a contribution margin perspective, the reason why we mentioned that this is not to be assumed as you know going forward into the next quarter as well, because typically we have certain lead lag between how we gain efficiencies on our cost front and when do we kind of pass it back onto our sellers and hence consumers in the form of lower pricing as well. So, that's I think the key reason. This quarter also as we've kind of mentioned, we had incurred certain additional cost in relation to servers, especially GPUs, and hence, we did not kind of pass it along back. And as that situation kind of normalizes, we would kind of reduce pricing to fund for the growth into our flywheels. From a full-year perspective, we don't give specific guidance. Of course, I think we will continue to make progress on the longer-term contribution margin targets that we have during the course of this year. So, it'll be substantially better than FY26, both with kind of the efficiencies that we're gaining on the logistics side and hence what we have there. And also, kind of moving into FY28, we will start seeing benefits coming in from ad monetization as percentage of NMP increases.
Vivek M (Jefferies): Got it, Dheeraj. The second one is on the, you know, and in some ways related to CMs, logistics efficiency you have spoken about, 15% faster, you know, deliveries. So, two parts. One is on a YoY basis because festive season, you know, is in a different quarter, is there also a network, you know, effect of underutilization let's so to speak, in some ways this year versus last year, which is helping this 15%? And again, this 15% should be seen for 2Q plus 3Q combined? And the the second part is, you know, if you can just comment on Valmo, how you know, how things have been there on that front?
Dhiresh Bansal (Meesho Ltd): Sure. So, the first part of the question in respect to the speed improvement that we have seen in this quarter, that's a continuing trend. So, even in Q2 and Q3 put together, we expect that to kind of continue. The reason why that is happening, I think we have mentioned a few, but just to highlight, one, the fact that density increase and especially as we kind of have more capacity creation that has happened across the course of the year, that also kind of helps with faster delivery timelines. So, to give you an instance, let's say if on the same route earlier we were operating two shifts, now we are we are able to operate three shifts of line haul, then the speed would improve. So, the growth itself and the density kind of leads to better speed across the network. We've also aided that with kind of better network design that has happened across our network and some of the 3PL networks as well. And lastly, I think improvements on the software side, which is Geo India LLM, which is a more sustainable improvement that we keep doing in the form of improvement of address accuracy, hence making it easier to find the end users, has been the reason for improvement in speed. That we expect to sustain across the quarters too.
Vivek M (Jefferies): And, Dheeraj, comments on Valmo?
Dhiresh Bansal (Meesho Ltd): Yeah. So, I think we continue to make progress on Valmo in terms of reducing our cost of doing business. And I think, even from a capacity perspective, we've had a good festive season. So, some of the problems let's say that the overall logistics ecosystem saw last year, I think they are largely kind of behind us. And this festive season has been good both in terms of capacity availability as well as efficiency of the operations. So, that's I think on the Valmo, as well as overall logistics side.
Vivek M (Jefferies): Sure. And if I can ask, you know, one more, which is, you know, your on the outlook side, you have mentioned about you are watchful, you know, on the on the macro side. While, you know, you stand for value, but there is a fair amount of discretion, I am guessing, at the value level also for the kind of, you know, users you serve. How worried are you with, you know, with the macro and can this, you know, does that worry you from a let's
Vivek M (Jefferies): demand perspective. I know world is very volatile, there are a lot of uncertainties, but but can that, you know, can the household budgets you know can can that impact the point that you made? Are you basically how worried are you about it?
84 more turns of this transcript: log in to Stocksigma to read the full call.