HSBC has initiated coverage on Swiggy with a Hold rating and a target price of ₹550. The brokerage highlighted Swiggy’s pioneering role in both food delivery (FD) and quick commerce (QC) but expressed concerns over its inability to sustain its early mover advantage amid intense competition.
While Swiggy’s FD business is expected to grow at a 16% CAGR over FY24-27, QC is projected to expand at a robust 65% CAGR. However, HSBC does not forecast EBITDA breakeven for the overall business before FY28, citing growth challenges and severe margin pressures. Key upside risks include better-than-expected execution and valuation catch-up.
The company recently launched initiatives to reduce delivery time in QC, aiming to compete with peers like Zomato and Blinkit. Swiggy’s strategy will likely involve balancing cost optimization with market share retention.
