Swiggy shares have taken the Indian stock market by storm, rising 25% from their issue price and hitting a market capitalization of ₹1 lakh crore.
The food delivery and quick commerce company made its debut on November 13, closing the first trading day at a 17% premium to the issue price.
On the second day, Swiggy shares extended their upward momentum, hitting a new high of ₹489.25 on the BSE before a slight pullback.
Key Listing Details
| Exchange | Listing Price | Issue Price | Premium (%) |
|---|---|---|---|
| BSE | ₹412 | ₹390 | 5.64% |
| NSE | ₹420 | ₹390 | 7.7% |
Despite a brief dip following the initial surge, Swiggy shares maintained strong demand from investors, reflecting optimism about the company’s growth potential.
Brokerages Weigh In: Is Swiggy a Buy?
Several leading brokerages have initiated coverage on Swiggy, with mixed yet optimistic outlooks:
- HDFC Securities: Rated Swiggy as ‘Add’ with a target price of ₹430 per share, based on a Sum of the Parts (SOTP) valuation. The firm believes that Swiggy is trailing behind its competitor Zomato but could catch up with strategic improvements in core offerings.
- JM Financial: Issued a ‘Buy’ recommendation with a target price of ₹470 by March 2026. Despite valuing Swiggy at a discount compared to Zomato due to differences in scale and profitability, the firm sees significant upside potential.
- Mehta Equities: Suggests a ‘Hold for long-term’ strategy, noting strong investor interest and potential for sector growth.
Swiggy vs. Zomato — A Competitive Analysis
The rivalry between Swiggy and Zomato continues to be a hot topic for investors. While Zomato has maintained its market leadership, Swiggy’s recent momentum suggests it could close the gap, particularly in the quick commerce segment.
| Metric | Swiggy | Zomato |
|---|---|---|
| Market Cap | ₹1,01,939 crore | ₹1,10,000 crore |
| Profitability (FY24-27) | Improving (2.5%) | Higher (5-7%) |
| Sales CAGR (FY24-27) | 26% | 30% |
Profitability Outlook — Turning the Tide
Brokerage firms expect Swiggy’s profitability to improve significantly in the coming years. Factors contributing to this outlook include better fixed-cost absorption, increased order density, and higher Average Order Value (AOV).
The projected Adjusted EBITDAM is set to improve from -15% to 2.5%, while Return on Capital Employed (RoCE) is expected to rise from -25% to 1% by FY27.
Investor Sentiment — Should You Buy, Hold, or Sell?
Investor sentiment remains bullish despite short-term volatility. The strong post-listing demand suggests a positive outlook for the sector.
Analysts recommend holding Swiggy shares for the long term, especially given the anticipated growth in the food delivery and quick commerce market.
Expert Recommendations:
- Buy and Hold: Strong potential for growth in the next 3-5 years.
- Long-Term Growth: Investors should focus on Swiggy’s strategic shifts and market positioning.
Final Thoughts: Is Swiggy a Worthy Investment?
Swiggy’s successful market debut and subsequent rally highlight investor confidence in its business model and growth potential.
While short-term price fluctuations are expected, the long-term outlook appears promising as the company refines its strategies to enhance profitability and market share.
Disclaimer
The content provided is for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research or consult a financial advisor before making investment decisions.
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