Since its opening on November 13, 2020, Swiggy's share price has increased by more than 12% from its IPO price of INR 412. As of November 27, shares rose by 8% during early trading on the BSE, reaching INR 499 despite the weakened stock market.
The stock is currently available at a 35-40% discount to its primary rival, Zomato. Nonetheless, a brokerage firm, UBS, has predicted that this gap might be reduced, seeing that Swiggy has adjusted its market share. UBS has started Swiggy with a ‘buy’ rating, and the target price set on the company’s stock is INR 515, which is higher than the previous close by 11%.
UBS has reported that Swiggy’s market share in the food delivery space has started to consolidate. From November 2023 through September 2024, Swiggy’s volume growth was on par with Zomato’s, which improved over the earlier difficulties when Zomato’s ‘Gold’ program increased the average order frequency of its premium customers.
While Zomato's user base increased, especially with more users from tier-II cities after the pandemic, recent trends indicate that Swiggy is closing these gaps. UBS pointed out that Swiggy is now on par with Zomato regarding restaurant connections and delivery employees. The recall remains intact and is still at par with Zomato, strengthening its position in the competitive structure.
According to UBS, Swiggy’s gross merchandise value (GMV) in food delivery for the fiscal year 25 is expected to grow at a y-o-y rate of 18%, trailing only Zomato’s projected growth of 23%.
Blinkit and Zepto have been strengthening their competition with Swiggy Instamart in the quick commerce segment. However, UBS outlines that Swiggy Instamart has made several operational tweaks with dark stores being bigger and more concentrated implying recovery. Blinkiters are more dominant in markets such as Delhi, where the company enjoys the benefits of brand recognition.
Swiggy has been increasing its capital expenditures in the last year or one and a half years without any doubt. UBS expects these investments to help the volume growth recovery in FY25 and a positive mix and price effect in FY26.
Net loss rose to INR 611 cr in Q1 FY 25 compared to INR 564.08 cr in the same period last year, up 8% YoY. The reason for that rise was an increase in operating expenses. However, it saw a spike in revenue from operations of INR 3,222.2 crore, up 35% attributable to a stellar show in its food delivery and quick commerce businesses.