Swiggy shares surged nearly 3% after Morgan Stanley initiated coverage on the stock with an Overweight rating and a target price of ₹405. The brokerage firm cited improved execution in food delivery and a strong push into quick commerce (QC) as key growth drivers.
Morgan Stanley raised its total addressable market (TAM) estimate for QC to $57 billion by 2030 and expects Swiggy to maintain its market share. The firm also forecasts QC to reach contribution margin breakeven in six quarters and adjusted EBITDA breakeven in the second half of FY29.
Swiggy’s food delivery margins are anticipated to gradually match those of rival Zomato (referred to as “Eternal”). Despite ongoing heavy investments, the stock valuation hasn’t fully priced in Swiggy’s long-term topline potential, according to analysts.
Valuation-wise, Swiggy’s food delivery business is pegged at 25x FY28 adjusted EBITDA, with a 5% discount to Zomato. The QC segment is valued at 27x FY31 adjusted EBITDA, with a 25% discount.
Swiggy shares opened at ₹338.00 today, and, at the time of writing, reached a high of ₹342.45 and a low of ₹337.45. The stock remains significantly below its 52-week high of ₹617.30, but above the 52-week low of ₹297.00.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
