Swiggy Shares Jump 5% After Kotak Initiates Coverage With ‘Buy’

Swiggy Shares Jump 5% After Kotak Initiates Coverage With ‘Buy’

SUMMARY

Shares of the foodtech major Swiggy have soared 5.4% at INR 459 apiece on the BSE intraday trading session today (February 3)

Kotak Institutional Equities initiated a ‘buy’ rating on the company’s stock and suggested a fair value (FV) of INR 500

The FV initiated by the brokerage indicates an upside of 14.8% from the previous session’s closing price

Shares of the foodtech major Swiggy have soared 5.4% at INR 459 apiece on the BSE intraday trading session today (February 3).

This comes after brokerage Kotak Institutional Equities initiated a ‘buy’ rating on the company’s stock and suggested a fair value (FV) of INR 500.

As of 03:03 PM, the company’s shares were up more than 5.2% at INR 458.10 apiece on the BSE, compared to its last close of INR 435.30 per share, on Saturday (February 1).

The market capitalisation of the company currently stands at INR 1,02,543.27 Cr ($11.77 Bn).

The FV initiated by the brokerage indicates an upside of 14.8% from the previous session’s closing price. 

On the longer run, the brokerage seems to remain positive on the prospects of Swiggy’s food delivery business and expect the company to benefit from a largely duopolistic, stable market.

Kotak further said that it believes there is considerable potential for Swiggy to target several new first-time users along with driving higher ordering frequencies among existing users.

Hence, the brokerage firm is betting on the company saying that Swiggy is well-positioned to grow at a strong pace over the next decade.

Swiggy made its market debut on the exchanges on November 13, 2024. The stock was listed at INR 420 on the NSE, a premium of nearly 8% from its IPO issue price of INR 390 per share. Meanwhile, shares started trading at INR 412, a premium of almost 6% on the BSE.

Brokerages have had a positive outlook on the company’s potential in the rapid growth of food delivery and quick commerce markets in the country today.

For instance, multiple brokerages have initiated coverage with a buy rating for Swiggy, where global brokerage firm UBS gave a target price (PT) of INR 515, JM Financial went with INR 470, and domestic brokerage Axis Capital’s PT of INR 640 on the stock.

In terms of financial performance, the foodtech major trimmed its consolidated net loss by 4.78% to INR 625.53 Cr in the second quarter of FY25 from INR 657 Cr in the year-ago quarter. Furthermore, its operating revenue zoomed 30% to INR 3,601.45 Cr during the quarter under review from INR 2,763.33 Cr, a year ago.

Updated at 03:07 PM

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