Swiggy share price zooms 10% to new peak ahead of Q2FY25 numbers, up 39% from IPO price | Stock Market News

Swiggy, the popular food delivery aggregator and a direct competitor to Zomato, saw its shares spike 10 per cent in Tuesday’s trade (December 3), reaching a fresh high of ₹541.95 per share. The surge in shares comes just ahead of the company’s Q2FY25 results announcement, scheduled for today, marking Swiggy’s first earnings report since its listing.

Separately, bourses BSE and NSE have sought clarification from the company regarding a news report titled “Swiggy expands 10-minute food delivery service Bolt to over 400 cities.” Swiggy’s reply is awaited.

Swiggy made its debut on Dalal Street on November 13, listing with a 7.7 per cent premium at ₹420, above the issue price of ₹390 per share. Since its listing, the stock has continued to climb without any significant pullbacks and is currently trading 39 per cent higher than its IPO price.

Following its entry on the exchanges, both domestic and global brokerage firms have provided a positive outlook on the company, citing strong growth opportunities in the quick commerce segment.

UBS, Motilal Oswal initiates coverage on the stock

Global brokerage firm UBS initiated coverage on the stock with a ‘Buy’ rating and a 12-month target price of ₹515. It believes the stock is priced at a 35 per cent to 40 per cent discount to Zomato and sees room for this valuation gap to narrow as Swiggy demonstrates stabilising market share.

“With early signs of market share stabilization in food delivery and recent investments and strategic changes in quick commerce (Q-com) leading to likely volume growth (and margin) recovery, we believe this discount (compared to Zomato) should narrow over time,” said UBS.

The brokerage stated that the risk-reward for the stock is attractive, as it is valued at an estimated Enterprise Value (EV) to revenue of 6.2 times, compared to 9 times for Zomato. UBS also highlighted that while Swiggy’s volume growth lagged behind Zomato’s in CY23, it has improved in CY24, with the gap between the two in terms of volume growth narrowing meaningfully.

Prior to UBS, domestic brokerage firm Motilal Oswal initiated coverage on Swiggy with a ‘Neutral’ rating and a target price of ₹475 per share. According to Motilal Oswal, Swiggy distinguishes itself within a competitive landscape where Zomato currently holds a strong position.

The brokerage emphasised that Swiggy’s strategic advantage lies in its all-in-one app approach, which enables seamless cross-utilisation of services and drives operational efficiency. This integrated approach could be a key differentiator as the company navigates both the food delivery and quick commerce sectors.

“Swiggy stands out in terms of its multi-service platform, which could boost user engagement and operational efficiencies,” MOSL highlighted in its report.

Motilal Oswal described quick commerce as a “once-in-a-lifetime opportunity” that could revolutionise organised retail in India. Swiggy’s entry into this space positions it to be among the top three players, a development that MOSL believes could be significantly rewarding, given the rapid growth of the sector.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.