Shares of Swiggy rose over 4% in early deals on Monday after global brokerage firm Nomura initiated coverage on the company with a ‘Buy’ rating. It fixed a target price of ₹550 per share for the food delivery firm. This indicates a potential 25% upside from Friday’s closing price. Swiggy stock ended at ₹439.75 on Friday.
Swiggy shares climbed 4.55% to Rs 459.10 against the previous close of Rs 439.10 on BSE. Market cap of the firm stood at Rs 1.10 lakh crore.
Nomura’s favourable outlook stems from Swiggy’s food delivery business entering a “steady profitability trajectory,” expected to continue as a “key cash generator.” The firm also noted that “while the company’s quick commerce vertical still holds a challenger position, profitability in this segment is also likely to improve.”
Additionally, Nomura highlighted that “Swiggy is well funded to scale its quick commerce business further, and therefore the risk of equity dilution remains low.” However, it cautioned that “a broader macroeconomic slowdown could pose risks to growth assumptions in the online food delivery space.”
In parallel to Swiggy, Eternal Ltd., parent company of Zomato, received a ‘Buy’ rating from Nomura with an increased target price of ₹370 from ₹300. Eternal’s food delivery segment is anticipated to grow steadily alongside improving profitability, with its quick commerce division witnessing contribution margins stabilising. Eternal’s stock concluded the previous session 1% higher at ₹329.50. This market response signals a broader trust in the sustained expansion of both the online food delivery and quick commerce industries.
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