The food delivery and quick grocery business in India has seen tremendous growth in recent years, driven by changing consumer habits, urbanization, and a growing preference for convenience. Companies like Swiggy and Zomato dominate the food delivery landscape, offering a vast range of cuisines from local restaurants and chains, with fast delivery times and user-friendly apps. These platforms also expanded their services to include grocery deliveries through partnerships with supermarkets and local kiranas.
Swiggy Instamart and Zomato’s BlinkIt cater to consumers seeking quick grocery solutions, capitalizing on the increasing demand for online shopping. As internet penetration deepens and consumer trust grows, the industry is poised for further growth, with innovations like dark kitchens and AI-powered logistics expected to improve service efficiency and reach tier-2 and tier-3 cities.
Share Price
The shares of Swiggy Ltd are currently trading at Rs. 580.2 up by 0.49% from its previous cloe of RS. 577.35 as of December 19, 2024.
Recent Update
JP Morgan Initiates Coverage on Swiggy with Overweight Rating
JP Morgan has initiated coverage on Swiggy with an overweight rating and a target price of ₹730 per share, highlighting the company’s strong potential in food delivery and quick commerce. The global brokerage sees Swiggy emerging as an “underappreciated winner” in India’s local services ecosystem due to its renewed focus and improved execution across its core businesses. Analysts are optimistic about the company’s ability to scale quickly and expand profitability from FY2025 to FY2028.
Swiggy’s Valuation and Growth Potential
Swiggy is currently trading at a 32% to 42% discount to its competitor Zomato, which JP Morgan views as overly pessimistic. With a current valuation of 1.8 times Enterprise Value to Gross Order Value (EV/GOV) and 6.1 times Enterprise Value/Revenue (EV/Revenue) based on FY2026 earnings, the brokerage believes the market is undervaluing Swiggy’s future prospects. They expect the company to outperform peers in terms of growth and profitability.
Support from Other Brokerages
This positive outlook is shared by other analysts as well. Recently, global brokerage firm CLSA initiated coverage on Swiggy with an outperform call, citing significant growth potential in the food delivery and quick commerce sectors. Both JP Morgan and CLSA believe Swiggy is well-positioned to address the large Total Addressable Market (TAM) in these spaces, reinforcing confidence in its future trajectory.
Written By: Dipangshu Kundu
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