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Swiggy shares rose over 5% after the company got its highest price target from CLSA who project an upside of 32%; Check target price
Swiggy Share Price
Shares of food and grocery delivery firm Swiggy surged by as much as 5.6%, reaching Rs 567.80 on Tuesday, following an initiation of coverage by global brokerage CLSA, which set a target price of Rs 708.
CLSA assigned an “outperform” rating to Swiggy, highlighting the company’s significant growth potential as it taps into a large total addressable market (TAM) for both food delivery and quick commerce. With a target price of Rs 708 per share, CLSA sees a 32% upside from the current levels, which led to a more than 4% rise in Swiggy’s stock during the morning session on December 10.
While Swiggy is expected to lag behind market leader Zomato, CLSA believes that this is already reflected in Swiggy’s current valuation and share price. The brokerage anticipates Indian quick commerce to grow sixfold between FY24 and FY27, with Swiggy positioned as one of the major beneficiaries.
Motilal Oswal also highlighted that Swiggy “stands out” in the competitive food delivery and quick commerce market, currently dominated by Zomato. Swiggy’s all-in-one app strategy is seen as key to driving “strong cross-utilization across services and better operational efficiency,” according to MOSL.
Analysts noted that Swiggy’s gap with Zomato is no longer widening, which suggests the company is becoming more competitive in the food delivery market. In the quick commerce space, Swiggy’s Instamart competes with Zomato’s Blinkit, as well as players like Zepto, by focusing on rapid delivery. Swiggy has been expanding its dark store network to bolster its quick commerce operations.
Swiggy reported a 30% year-on-year revenue increase, reaching Rs 3,601.5 crore for the July-September quarter, up from Rs 2,763.3 crore in the same period last year. Sequentially, revenue grew from Rs 3,222.2 crore in Q1 FY25. The company’s net loss narrowed by 5% to Rs 625.5 crore in Q2, compared to a loss of Rs 657 crore in the previous year, though it was slightly higher than the Rs 611 crore loss reported in the previous quarter.
Among the eight analysts covering Swiggy, three have a “buy” recommendation, three have a “sell” recommendation, and two have rated the stock as a “hold.”
Swiggy’s shares closed 0.8% lower on Monday at Rs 540.3, but have already risen 38% from their IPO price of Rs 390.
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