Shares of Swiggy, the food and grocery delivery platform, surged by 5.6% to reach ₹567.80 on Tuesday after global brokerage firm CLSA started coverage of the stock with a “Buy” rating and set a target price of ₹708.
CLSA expressed optimism about Swiggy’s future, citing the company’s potential to grow significantly in the large food delivery and quick-commerce market. The brokerage said it expects Swiggy’s operations to improve as the company focuses on accelerating growth and increasing profitability. It also highlighted that the quick-commerce sector in India could grow six times between FY24 and FY27.
“Swiggy is likely to remain behind Zomato, but this gap is already factored into the stock’s price,” CLSA noted. It added that Swiggy’s improved execution will drive its growth and profitability in the coming years.
In the September quarter, Swiggy reported a 30% year-on-year (YoY) increase in revenue from operations, rising to ₹3,601.5 crore from ₹2,763.3 crore in Q2 FY24. On a quarter-on-quarter (QoQ) basis, revenue grew by 11.77%.
Swiggy’s gross order value (GOV) also grew 30% YoY to ₹11,306 crore, and the number of platform monthly transacting users rose by 19.2% YoY to 17.1 million, showing steady user growth.
According to Motilal Oswal, Swiggy’s food delivery orders are expected to grow at 12.5% annually, with an average order value (AOV) growth of 1.4%, leading to a GOV growth of 14.1% over FY24–37. The quick-commerce segment is projected to grow faster, with orders increasing at 23.6% annually, AOV rising by 3.2%, and GOV expanding by 27.6%.
Motilal Oswal also noted that Swiggy plans to grow faster than the category average (including Zomato) over the medium term in food delivery. However, the firm maintained a “neutral” rating for Swiggy due to competition from players like Zomato and Blinkit and valued Swiggy at ₹475 per share.
Expansion Plans
Swiggy aims to double its Instamart dark store count by March 2025 and invest ₹1,600 crore into its subsidiary, Scootsy Logistics, to drive further growth. The company also announced the creation of a wholly owned subsidiary to explore sports-related ventures.
Swiggy’s growth outlook, driven by strong execution and rapid expansion plans, has put it firmly on the radar of investors despite competitive risks in the food delivery and quick-commerce space.
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