Swiggy soars after foreign broker assigns buy rating

Swiggy spurted 8.90% to Rs 469.65 after a foreign broker initiated coverage on the counter with a 'buy' rating and a target price of Rs 515.

The brokerage highlighted that Swiggy is well-positioned for growth, currently trading at a 35% discount to Zomato. It added that in the online food delivery (OFD) segment, Swiggy is narrowing the gap with Zomato in terms of margins and scale. Meanwhile, in the quick commerce (q-com) space, Swiggy has shown encouraging signs but still has areas for improvement. The brokerage remains optimistic about Swiggy's prospects, seeing significant growth potential in the evolving market.

Swiggy made its stock market debut on 13 November 2024 and listed at Rs 412, a premium of 5.64% to the issue price of Rs 390. The initial public offer (IPO) of Swiggy was subscribed 3.59 times. The issue opened for bidding on 6 November 2024 and it closed on 8 November 2024. The price band of the IPO was fixed between Rs 371 to 390 per share.

Swiggy is a new-age, consumer-first technology company offering users an easy-to-use convenience platform, accessible through a unified app - to browse, select, order and pay for food Food Delivery", grocery and household items Instamart, and have their orders delivered to their doorstep through its on-demand delivery partner network.

Its platform can be used to make restaurant reservations Dineoutand for events bookings SteppinOut, avail product pick-up/ drop-off services Genie and engage in other hyperlocal commerce (Swiggy Minis, among others) activities. Being among the first hyper local commerce platforms, Swiggy has successfully pioneered the industry in India, launching Food Delivery in 2014 and Quick Commerce in 2020.

The firm reported a consolidated net loss of Rs 611 crore and sales of Rs 3,222.22 crore for the three months ended on 30 June 2024.

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