Swiggy shares are in focus today (December 19) after two global brokerages initiated coverage on the stock. In the previous session, the stock ended with a cut of over 1 per cent at Rs 577.35 apiece on the BSE.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Last week, around 6.5 crore shares became eligible for trading as the one-month lock-in period for anchor investors who invested in the Swiggy IPO concluded. 

Since its listing on November 13, 2024, the stock as against the IPO issue price of Rs 390 has moved higher by 48 per cent to the current levels.

Brokerages which initiated fresh coverage on Swiggy

JP Morgan on Swiggy has initiated coverage on the stock with an 'overweight' rating. The target set by the global brokerage is Rs 730- implying gains of over 26 per cent.

The brokerage believes the company is fast catching up across both the food delivery as well as quick commerce (QC) verticals, thanks to a renewed focus and improved execution. Swiggy trades at a 32-42 per cent discount to Zomato that appears overly pessimistic to us, said the brokerage.

Also, the brokerage sees the company hitting critical scale across both core businesses, enabling a faster-than-peer expansion in profitability over FY25-28.

JP Morgan further expects Swiggy to emerge as the dark horse or underappreciated winner in the country's local services ecosystem.

BofA in contrast has initiated coverage with a  'buy' and a target price of Rs 690. The brokerage noted that the company's food delivery segment is serving as the cash cow business, while the Quick Commerce (QC) is a multi-year theme. Also, the company is presenting improving KPI as well as margins.

Furthermore, BofA aded that a catch up in the Quick Commerce segmet might lead to faster growth.