Swiggy Shares Jump 6.2% After UBS Initiates Coverage With ‘Buy’

Swiggy Launches New Membership Plan 'One BLCK'

SUMMARY

The shares opened today’s trade 2.3% higher at INR 441.25 against the previous close of INR 431.25

UBS reflected a 19% upside for Swiggy’s stock, setting the price target of INR 515 for the upcoming 12 months

UBS expects Swiggy’s quick commerce vertical to achieve adjusted EBITDA breakeven in FY29

Shares of Swiggy jumped as much as 6.2% during intraday trading to INR 458.00 apiece on the BSE today (November 26), a day after brokerage firm UBS initiated the company’s coverage with a ‘Buy’ rating.

The shares opened today’s trade 2.3% higher at INR 441.25 against the previous close of INR 431.25.

It then rose to the intraday high only to pare some gains to trade 3.10% higher at INR 444.60 at 11:05 AM on the BSE.

As much as 68 Lakh shares of Zomato changed hands till 11:05 AM while the company’s market capitalisation remained at INR 99,554 Cr by then.

Yesterday, UBS reflected a 19% upside for Swiggy’s stock, setting the price target of INR 515 for the upcoming 12 months.

The brokerage firm said there is “plenty of room at the table” and Swiggy is well positioned to benefit from the rapid growth in India’s food delivery and quick commerce markets.

“While the company lost market cap in CY23, data from UBS Evidence food delivery receipts shows signs of market share stabilisation; the same is visible in the Q1 FY25 results as well,” the brokerage said.

UBS expects Swiggy’s quick commerce vertical to achieve adjusted EBITDA breakeven in FY29.

Post listing, Swiggy has witnessed optimistic coverage from a slew of brokerage firms. So far this month, JM Financial initiated its coverage on Swiggy with a ‘Buy’ rating and a PT of INR 470. On the other hand, Motilal Oswal gave Swiggy’s shares a ‘neutral’ rating but a PT of INR 475.

Since its listing on November 13 on the bourses, Swiggy’s shares have given an upside return of 4.6% on BSE from its listing price of INR 412.

The company is also looking to strengthen its leadership team post-listing. Just a day ago, it hired former Flipkart executive Kanika Tiwari as the head of monetisation for its quick commerce business Instamart.

Earlier this month, it appointed former Lenskart executive Supriya Shankar as vice president of events and experience vertical, Shalabh Shrivastava as senior vice president of the driver organisation and Hari Kumar G as senior vice president and chief business officer for Swiggy Instamart.

It is pertinent to note that Swiggy made a bumper IPO worth INR 11,324 Cr, of which fresh issue was INR 4,999 Cr and offer for sale (OFS) of 17.5 Cr shares.

On the financial front, Swiggy trimmed its loss by 44% to INR 2,350 Cr in the financial year ended March 31, 2024 from INR 4,179.3 Cr in FY23. Operating revenue rose 36% to INR 11,247.3 Cr in FY24 from INR 8,264.5 Cr on the back of the growth of Swiggy Instamart.