Swiggy races 6% as Bernstein initiates with 'Outperform'; sees 29% upside

Swiggy share price: Food delivery platform Swiggy shares were in demand on Thursday, January 9, 2025, as the scrip rallied up to 6.12 per cent to hit an intraday high of Rs 520.70 per share. 

 

The northward move in the Swiggy share price came after reports suggested that global brokerage Bernstein initiated coverage with ‘Outperform’ rating on the Swiggy stock, with a target price of Rs 635. The target price reflects an upside of 29.42 per cent from its previous close of Rs 490.65 on January 8, 2025. 

 

According to reports, Bernstein said that Swiggy's current valuations seem reasonable, with the potential for its shares to re-rate. The brokerage projects that the food delivery segment's gross order value will grow at a rate of 21 per cent from FY25 to FY27. Bernstein also highlighted that Swiggy is one of the key beneficiaries of India's growing convenience economy and will gain from the shift towards super-fast delivery models. 

 

 

Last year in December, CLSA, a Hong Kong-based brokerage, initiated coverage on Swiggy with an 'Outperform' rating and a target price of Rs 708.

 

In a note, CLSA analysts highlighted Swiggy as one of India's most innovative companies, noting its early entry into food delivery and quick commerce. The brokerage believes that Swiggy has considerable growth potential, given the vast total addressable market (TAM) in these sectors. 

 

Analysts also anticipate enhanced execution from Swiggy, along with accelerated growth and improving profitability. They forecast the Indian quick commerce market to grow six-fold between FY24-27, with Swiggy positioned to be one of the main beneficiaries. While Swiggy is expected to continue trailing behind Zomato, CLSA believes the current valuation already reflects this gap.

 

During the same period, domestic brokerage Axis Capital also initiated coverage on Swiggy, with a ‘Buy’ rating and a target price of Rs 640 per share. 

 

Swiggy financial performance

 

Swiggy's consolidated net loss narrowed marginally in the second quarter of financial year 2025 (Q2FY25) to Rs 625.5 crore, as against Rs 657 crore a year ago. However, sequentially, the loss widened as the firm had reported a consolidated loss of Rs 611 crore in the first quarter of FY25.

 

Swiggy’s revenue from operations zoomed 30 per cent to Rs 3,601 crore in Q2FY25, from Rs 2,763.3 crore a year ago. 

 

Meanwhile, the company’s overall gross order value (GOV) surged 30 per cent annually to Rs 11,306 crore in Q2FY25. The platform's average monthly transacting users (MTU) soared 19.2 per cent Y-o-Y to 17.1 million. 

 

Swiggy Instamart, the company’s quick commerce platform, GOV growth accelerated to 24  per cent quarter-on-quarter (Q-o-Q) to Rs 3,382 crore. The overall orders zoomed 21  per cent Q-o-Q, with orders per dark store per day rising 10 per cent Q-o-Q. 

 

Swiggy IPO listing

 

Swiggy shares made their highly anticipated stock market debut on November 13, 2024. Swiggy shares listed at Rs 412 on the BSE, reflecting a 5.6 per cent premium over its IPO allotment price of Rs 390.The performance  was even stronger on the National Stock Exchange (NSE), where Swiggy shares opened at Rs 420, delivering a 7.6 per cent premium to its IPO price.

 

About Swiggy

 

Swiggy is an online food delivery and logistics platform based in India, offering a wide range of services beyond food delivery. Founded in 2014 and headquartered in Bangalore, Swiggy allows customers to order from a variety of restaurants, browse menus, and track deliveries, all without any minimum order requirement. 

 

In addition to its core food delivery service, Swiggy also provides quick commerce with Swiggy Instamart, which delivers groceries and essentials in just 10 minutes, and Swiggy Genie, a service for same-day parcel and document deliveries.

 

Swiggy operates in over 580 cities across India and has expanded its offerings with Swiggy One, a membership program that provides exclusive benefits on food, quick commerce, dining, and pick-up and drop services.

 

The market capitalisation of Swiggy is Rs 1,12,638.67 crore, according to BSE. The company falls under the BSE IPO category. 

 

The company competes with companies like Zomato, Zepto, Dunzo and FreshMenu among others.

 

At 10:43 AM, Swiggy shares were trading 2.56 per cent higher at Rs 503.20 per share. In comparison, BSE Semsex was trading 0.22 per cent lower at 77,977.83 levels.