Swiggy has received upbeat commentary from both Jefferies and Morgan Stanley following its Q1 performance, with Jefferies upgrading the stock to a buy rating and setting a target price of ₹500 per share. Morgan Stanley has retained its overweight stance with a target of ₹450 per share.
According to Jefferies, food delivery witnessed strong growth in Q1, while quick-commerce (Q-commerce) momentum remained robust. However, EBITDA margin declined quarter-on-quarter, impacted by higher rider and staff costs. Despite this, the management views Q1 as the profitability trough, suggesting an inflection point going forward.
Morgan Stanley echoed a positive outlook, stating that food delivery trends are meeting expectations. The brokerage has also raised profitability assumptions for the Q-commerce segment and reduced overall loss projections, based on encouraging commentary from the company regarding Q2.
Together, the brokerages indicate growing confidence in Swiggy’s operating model, particularly its Q-commerce business, while acknowledging near-term margin pressures.
Disclaimer: This article is based on Jefferies and Morgan Stanley’s stock research reports. The views and target prices mentioned are theirs. This does not constitute a recommendation to buy or sell any stock. Please consult a registered financial advisor before making any investment decisions.
