Why food delivery platform Swiggy shares hit all time high in trade today?

Swiggy shares gained 9.4 per cent in Tuesday's trade on BSE and logged an all time high at Rs 542.10 per share. The counter saw buying after the food and grocery delivery firm said it has scaled up its 10-minute food delivery offering, Bolt, to over 400 cities and towns across the country. The company is also slated to release its September quarter results today.

 

Around 9:44 AM, Swiggy share price was up 3.46 per cent at Rs 512.5 per share. In comparison, the BSE Sensex was up 0.18 per cent at 80,391.71. The market capitalisation of the company stood at Rs 1,14,720.42 crore. The 52-week high of the stock stood at Rs 542.1 per share and 52-week low of the stock stood at Rs 390.7 per share.

 

The company believes that the expansion of Bolt to over 400 cities is a significant milestone in Swiggy’s mission to enhance customer experience through innovative solutions.

 

Further, the service was initially launched in Bengaluru, Chennai, Hyderabad, New Delhi, Mumbai, and Pune. It is now active not only in emerging hubs such as Jaipur, Lucknow, Ahmedabad, Indore, Coimbatore, and Kochi, but also in Tier- 2 and -3 cities such as Roorkie, Guntur, Warangal, Patna, Jagtial, Solan, Nashik, and Shillong.

 

Cities from Andhra Pradesh and Telangana have witnessed the highest adoption for Bolt followed by Haryana, Tamil Nadu, Gujarat, West Bengal, Rajasthan, and Punjab.

 

Bolt delivers food from more than 40,000 participating restaurants with a range of over 10 Lakh items to choose from.

 

The ‘Bolt - food in 10 mins’ title will be prominently featured on the Food page of the Swiggy app, making it easier for customers nationwide to access this speedy service.   

JM Financial Institutional Equities expects Swiggy to report an improving trend in most key operating metrics in the September quarter.

 

As per the report, in food delivery segment, the company is likely to deliver 6 per cent quarter-on-quarter (Q-o-Q) growth, marginally better than 5 per cent delivered by Zomato. The growth will be aided by growing traction for its co-branded credit card with HDFC Bank.

 

Segment profitability too is likely to improve meaningfully to 1.8 per cent as compared to 0.8 per cent in Q1, on the back of lower platform discounts and operating leverage benefits.

 

While in Quick Commerce (Instamart) we forecast gross order value (GOV) growth of 15 per cent Q-o-Q as compared to 25 per cent delivered by Zomato’s Blinkit, losses at contribution margin level could come down to -1.7 per cent as compared to  -3.2 per cent in Q1, driven by an uptick in take-rates and dark store and warehousing level operating leverage. 

Overall, analysts at JM Financial expect investors to focus on the company’s relative performance vs. Zomato and management commentary on profitability improvement in food delivery and quick commerce businesses.

On November 13, 2024, Swiggy made a debut on D-Street following the closure of its initial public offering (IPO). On the BSE, Swiggy shares are listed at Rs 412, reflecting a premium of Rs 22, or 5.6 percent, against the IPO allotment price of Rs 390.

 

Similarly, on the National Stock Exchange (NSE), Swiggy shares opened at Rs 420, higher by Rs 30, or 7.6 percent, from its IPO allotment price. 

 

Since its listing, Swiggy shares have gained 8.6 per cent against Sensex's rise of 3.2 per cent.