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Global brokerage firm UBS has initiated coverage on Swiggy Ltd., the food delivery aggregator and Zomato Ltd.'s competitor, with a 'Buy' rating and a price target of ₹515.
The price target ascribed by UBS, implies a potential upside of approximately 20% from Monday's closing levels.
The brokerage wrote in its note that Swiggy is well positioned for growth at 35% discount to Zomato.
Online Food Delivery (OFD): Swiggy is closing the gap with Zomato in terms of margins and scale.
Quick Commerce (Q-comm): While progress is promising, further improvements are needed.
The foreign brokerage estimates Swiggy's OFD gross merchandise value (GMV) growth for FY24-27 to be broadly similar to Zomato's (low-20s percentage) with adjusted EBITDA margins expected to reach 2.8% by FY27.
Key focus areas, as per the brokerage, include increasing fundraising activities, and growing competition in the quick commerce sector.
The stock started receiving recommendations from analysts even before making its debut on the exchanges.
On the bull side, JM Financial initiated coverage on Swiggy with a price target of ₹470 per share.
The brokerage said that Swiggy continues to be one of the leading hyperlocal delivery platforms in India, bettered only by Zomato.
However, JM Financial's bullish view is countered by Macquarie, who initiated coverage on the stock with an "underperform" rating and a price target of ₹325.
Macquarie believes that Quick Commerce is a more complex business with not sustainable economic profits.
Even with core revenue anticipated to grow at a Compounded Annual Growth Rate (CAGR) of 23%, the brokerage expects a breakeven at a Group EBIT level only in the financial year 2028.
Shares of Swiggy Ltd. settled nearly 3% higher at ₹428 on Monday.
The price target ascribed by UBS, implies a potential upside of approximately 20% from Monday's closing levels.
The brokerage wrote in its note that Swiggy is well positioned for growth at 35% discount to Zomato.
Online Food Delivery (OFD): Swiggy is closing the gap with Zomato in terms of margins and scale.
Quick Commerce (Q-comm): While progress is promising, further improvements are needed.
The foreign brokerage estimates Swiggy's OFD gross merchandise value (GMV) growth for FY24-27 to be broadly similar to Zomato's (low-20s percentage) with adjusted EBITDA margins expected to reach 2.8% by FY27.
Key focus areas, as per the brokerage, include increasing fundraising activities, and growing competition in the quick commerce sector.
The stock started receiving recommendations from analysts even before making its debut on the exchanges.
On the bull side, JM Financial initiated coverage on Swiggy with a price target of ₹470 per share.
The brokerage said that Swiggy continues to be one of the leading hyperlocal delivery platforms in India, bettered only by Zomato.
However, JM Financial's bullish view is countered by Macquarie, who initiated coverage on the stock with an "underperform" rating and a price target of ₹325.
Macquarie believes that Quick Commerce is a more complex business with not sustainable economic profits.
Even with core revenue anticipated to grow at a Compounded Annual Growth Rate (CAGR) of 23%, the brokerage expects a breakeven at a Group EBIT level only in the financial year 2028.
Shares of Swiggy Ltd. settled nearly 3% higher at ₹428 on Monday.
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