CLSA initiates coverage on this newly listed stock; projects potential gains of 32%

Since its listing in November this year, food delivery services company has gained as much as 38 per cent and Hong Kong-based global brokerage CLSA projects further upside potential in Swiggy. In the previous trade on December 9 (Monday), the stock closed with a cut of over 1 per cent at Rs 537.5 per share on the BSE.

The brokerage has initiated an outperform rating on the stock with a target of Rs 708, implying room for further gains of 32 per cent.

CLSA is bullish on the counter as it believes the company has significant growth potential as it addresses a very large total addressable market (TAM) both in the food delivery and quick commerce (QC) space.

Also, it sees the company's execution improving with accelerating growth and improving profitability.

The brokerage expects Indian quick commerce to grow 6X in FY24-27. Swiggy will likely continue to lag Zomato, but we believe this gap is in the price, added the brokerage.

Swiggy Q2 results

Food delivery aggregator Swiggy reported a net loss of Rs 625.5 crore for the September quarter, marking an improvement from the Rs 657 crore loss posted in the same period last year. The loss for the previous quarter ended June stood at Rs 611 crore.

Revenue grew significantly, up by 30 per cent year-on-year to Rs 3,601 crore, compared to Rs 2,763 crore in the same quarter last year and Rs 3,222 crore in the June quarter.

In its post-earnings investor presentaton, the company said that is projecting a break-even by the third quarter of the FY26 and an adjusted EBITDA break-even by the July-September quarter of financial year 2025.