Shares of food delivery and quick commerce players opened higher on Monday, September 8, after fresh coverage and target upgrades from global brokerage Nomura.
Swiggy Ltd gained 2.30% in early trade, rising ₹10.10 to ₹449.15 on the NSE, after Nomura initiated coverage with a ‘Buy’ rating and a price target of ₹550 per share, implying nearly 25% upside from Friday’s closing price of ₹439.05. The brokerage said Swiggy’s food delivery business is now on a steady profitability trajectory and is expected to remain a strong cash generator. While its quick commerce vertical remains in a challenger position, Nomura expects margins to improve with scale.
The brokerage also emphasized that Swiggy is well funded to expand quick commerce, lowering risks of equity dilution, though it flagged a potential macroeconomic slowdown as a key risk for growth.
Meanwhile, Eternal Ltd, parent of Zomato, also gained in today’s session after Nomura reiterated a ‘Buy’ rating and raised its price target to ₹370 from ₹300. The brokerage noted Eternal’s steady growth in food delivery and improving profitability, while highlighting that its quick commerce margins have bottomed out and the inventory-led model should support expansion.
Nomura has valued Eternal using a 40x FY2028 EV/EBITDA multiple for food delivery and 1.2x EV/GOV for quick commerce.
Currently, 27 analysts cover Swiggy, of which 22 recommend ‘Buy’, three say ‘Hold’, and two suggest ‘Sell’.
Investor sentiment turned positive on both stocks as the brokerage’s coverage highlighted the sector’s improving fundamentals.
