Swiggy shares jumped more than 2% after Citi increased its target price for the company from ₹465 to ₹495 while maintaining a “Buy” rating. The brokerage highlighted strong revenue growth, improving margins, and a clear path to profitability for Swiggy’s quick commerce segment.

Citi stated that Swiggy’s overall revenue rose 64% year-on-year, with adjusted EBITDA losses narrowing to ₹760 crore. Free cash burn improved to ₹950 crore, supported by a cash balance of approximately ₹6,800 crore following the sale of its Rapido stake.

The food delivery business showed steady growth, with gross order value rising 19% YoY and revenue increasing 21% YoY. Contribution margin improved to 7.6%, while adjusted EBITDA margin reached 2.8%, reflecting better operational efficiency.

Swiggy’s quick commerce segment also gained momentum, with gross order value up 23% quarter-on-quarter and 106% year-on-year, and revenue growing 26% QoQ and 111% YoY. Margins improved significantly, and Citi expects the segment to reach breakeven within the next one to three quarters.

Citi also raised the quick commerce target multiple to 1.0x EV/GOV from 0.9x, reflecting stronger growth prospects. Swiggy’s combination of robust revenue growth, improving margins, and a solid cash position continues to make it a stock to watch in India’s delivery and quick commerce market.

Swiggy shares were up 1.92% at ₹429.00 apiece around 10.06 am. It has declined 20.90% this year, so far.

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TOPICS: Swiggy