By Nesil Staney
Shares of online food delivery and quick commerce firm Swiggy sharply gained 12.7% in the past five trading sessions, the highest among large-cap firms, after at least eight brokers recommended buy calls. The scrip slumped more than 54% since December 2024 – from a high of Rs 617 to a low of Rs 297.
CLSA, a top institutional broker, expressed a positive outlook, recommending an ‘outperform’ rating with a huge target price of ₹708. They see significant growth potential in both food delivery and quick commerce. Swiggy is undervalued compared to its competitor Eternal, they said.
ICICI Securities set the target price even higher at Rs 740. Swiggy’s total addressable market is expected at $57 billion by 2030 because of improved market share and quick commerce potential, said Angel One, a discount broker.
“Instamart (Swiggy’s quick commerce business) has likely passed its peak investment phase, but under-utilisation weighs on near-term profitability,” said a report from Equirus, which has maintained ‘add’ on the stock. JM Financial also gave ‘buy’ call with revised target price of Rs 450. Anand Rathi also maintains a ‘buy’ rating with a target of Rs 400.
“Post 50% correction in the stock price over the past five months, value is emerging,” said, HDFC Securities, initiating a buy call. Jefferies set target share price to Rs 400. Swiggy closed Friday’s trade at Rs 372.
The factors behind the fall in share prices included poor financial performance, increased competition and the expiry of a significant lock-in period for early investors, which ended May 12. This freed up a large volume of shares for trading, however there were no bulk deals in Swiggy shares.
Prosus Ventures, SoftBank, Accel India, Elevation Capital and Tencent were among the early investors. The IPO was of ₹11,327 crore, including a fresh issue of ₹4,499 crore and an offer for sale of up to ₹6,828 crore. A similar correction trend was witnessed around lock-in expiry in the shares of Eternal and Nykaa. Swiggy got listed on November 13.
“High customer incentives, acquisition costs, aggressive dark store expansion (316 stores were added in Q4) and consequent under-utilised capacity were also weighing on the stock,” said HDFC Securities.
Swiggy’s consolidated net loss widened to Rs 1,081 crore in Q4FY25, nearly double the amount during the year-ago period. While revenue grew, expenses, particularly in the quick-commerce business (Instamart), also rose significantly, driving the loss. It faces increasing competition from Zepto and Blinkit in the quick-commerce space. This put pressure on Swiggy’s financial performance and has led to increased expenses as the firm attempted to maintain market share.
Apart from Swiggy, major gainers in large-caps last week included DLF (10%), Eternal (10%), Shriram Finance (8%) and JSW Energy (7%). Among mid-caps, Cochin Shipyard gained 23% and Prestige moved up 17%. Firstcry and Brigade gained 19% and 17%, respectively, among small-caps.