The newly listed food delivery company, Swiggy shares jumped nearly 6% to hit an intra-day high of Rs 567.90 after CLSA, an international brokerage firm, initiated coverage with a ‘Buy’ call. The brokerage house has given a target price of Rs 708, which is 32% higher than the December 9 closing price of Rs 536.85.
CLSA said that the company has a large and growing total addressable market (TAM) and it also has a clear early mover advantage. It further said that Swiggy’s execution has improved, with accelerating growth and enhancing profitability.
The brokerage house expects that the Indian quick commerce sector may grow 6 times in the next three years. Swiggy is one of the largest beneficiaries of it. However, Swiggy is expected to lag Zomato, which can be seen in the price as well.
What has Swiggy delivered in Q2?
The company’s consolidated net loss narrowed to Rs 625.5 crore in Q2 FY25 driven by robust order growth in both its food delivery and quick commerce segments, against a net loss of Rs 657 crore in the same period a year ago.
Swiggy’s revenue from operations rose by 30% to Rs 3,601.45 crore in the second quarter of the current financial year, compared to Rs 2,763.33 crore in the corresponding period last year.
Swiggy IPO details
Swiggy was listed at Rs 420 on the National Stock Exchange, a premium of 7.7% to the issue price. Meanwhile, it was listed at Rs 412 on BSE, a premium of Rs 5.6%. The IPO was opened on November 06 and closed on November 08. The IPO sold 11.54 crore fresh shares, which amounted to Rs 4,499 crore. Another component of the issue was an offer for sale of 17.51 crore shares which amounted to Rs 6,828.43 crore. The company’s IPO price band ranged between Rs 371 to Rs 390 per equity share.
