Swiggy Shares Surge 6.1% After New Apps Launch

SUMMARY

Swiggy's shares surged as much as 6.1% to INR 520.70 during intraday trading, breaking a four-day decline

The foodtech major launched two new apps - SNACC for 15-minute food delivery and Pyng for professional services

Bernstein initiated coverage with 'outperform' rating and INR 635 target price, while Q2 FY25 saw net loss narrow to INR 625.53 Cr

Shares of foodtech major Swiggy snapped up their four-day losing streak and jumped 6% to INR 520.70 apiece on the BSE during the intraday trading today (January 9).

The rally in the stock came a day after Swiggy rolled out a new app ‘SNACC’ targeting 15-minute food delivery in select areas of Bengaluru. This puts Swiggy in direct competition with Zepto Cafe and Zomato’s Bistro in the quick commerce space.

Additionally, the company launched Pyng, a services marketplace platform enabling professionals such as nutritionists, yoga instructors, and life coaches to list their services.

These developments come against the backdrop of Bernstein initiating coverage on Swiggy with an ‘outperform’ rating. The brokerage has given the stock a target price of INR 635, which implies a potential upside of almost 30% from its previous close.

Analysts at Bernstein expect Swiggy to maintain its market share at about 42% in food delivery despite rising competition.

“While competitive intensity is increasing from ecommerce players (Amazon, Flipkart), we expect incumbents (Swiggy, Zomato) to hold market share in quick commerce,” they said.

The brokerage projects Instamart to reach adjusted EBITDA breakeven by mid-FY27 and 3-4% by FY30.

Swiggy narrowed its consolidated net loss by 4.78% to INR 625.53 Cr in the September quarter (Q2) of the financial year 2024-25 (FY25) from INR 657 Cr in the year-ago quarter.

Operating revenue zoomed 30% to INR 3,601.45 Cr during the quarter under review from INR 2,763.33 Cr in the year-ago period.

In its shareholders letter, the company said it expects to attain adjusted EBITDA profitability on a consolidated level by Q3 FY26, with its quick commerce vertical projected to break even by Q2 FY27.

It is pertinent to note that Swiggy made its stock market debut last year, with its shares listing at INR 412 apiece on the BSE, a 6% premium over its IPO price of INR 390.

The stock has given an upward run of 19% since its public listing.

At 1:47 PM, shares of Swiggy were trading 2.21% higher at INR 501.40 apiece on the BSE.