Swiggy rises 5% after CLSA initiates coverage, sets target at Rs 708 apiece

The target price of Rs 708 per share implies a 31.7 per cent upside from the previous close of Rs 537.5 per share on BSE

Swiggy shares gained 5.6 per cent in the morning deals on Tuesday and clocked an intraday high at Rs 567.8 per share on BSE. The counter saw buying after global brokerage CLSA as per Bloomberg, initiated coverage on Swiggy with an 'Outperform' rating and set a 12-month price target at Rs 708 per share. This implies a 31.7 per cent upside from the previous close of Rs 537.5 per share on BSE. 

 

Around 9:48 AM, Swiggy share price slipped to Rs 554.1 per share, up 3.09 per cent on BSE. In comparison, BSE Sensex was up 0.12 per cent at 81,605.5. The market capitalisation of the company stood at Rs 1,24,032.37 crore. The company's stock gained 37 per cent from its issue of Rs 390 per share. Swiggy shares were listed on November 13, with a premium of Rs 22, or 5.6 percent on BSE at Rs 412 per share. 

 

Recently, UBS initiated coverage on the stock with a 'Buy' rating, citing 'significant' valuation discount to rival Zomato. The brokerage has set a 12-month price target of Rs 515. 

 

Analysts at UBS believe Swiggy is well positioned to benefit from the rapid growth in India's food delivery and quick commerce markets with an estimated Gross Merchandise Value (GMV) and revenue compounded annual growth rate (CAGR) of 35 per cent and 29 per cent over FY24-27e. 

 

With early signs of market share stabilisation in food delivery, and recent investments and strategic changes in q-com leading to likely volume growth (and margin) recovery in q-com, analysts believe this discount should narrow over time.  

 

The food delivery platform in its Q2FY25  narrowed its consolidated net loss marginally to Rs 625.5 crore from Rs 657 crore a year ago. 

 

However, sequentially, the loss was up as the firm had reported a consolidated loss of Rs 611 crore in the first quarter of FY25.

 

Swiggy’s revenue from operations soared 30 per cent to Rs 3,601 crore during Q2FY25 as compared to Rs 2,763.3 crore a year ago. Its overall gross order value (GOV) too grew by 30 per cent year-on-year (Y-o-Y) to reach Rs 11,306 crore during Q2FY25. 

 

Swiggy's consolidated net loss marginally narrowed in the second quarter of financial year 2025 (Q2FY25) to Rs 625.5 crore from Rs 657 crore a year ago.