Swiggy shares rally 8% in 2 days; IIFL sees 46% upside potential

Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Quick commerce in focus
Technicals turn bullish
Shares of India's second-largest foodtech platform Swiggy , climbed as much as 5.1% on Thursday to Rs 383.80 on the BSE, extending their two-day rally to 7.9% after brokerage firm IIFL Capital initiated coverage with a bullish outlook, citing strong growth prospects in both food delivery and quick commerce IIFL Capital launched coverage on Swiggy with a 'buy' rating and a target price of Rs 535, a 46% upside from Wednesday's closing price. The brokerage highlighted 'improving execution, strong positioning in food delivery, and underappreciated potential in quick commerce' as key drivers of future gains.Swiggy, which has seen its market share dip in recent quarters, is forecasted to deliver a 28% compound annual revenue growth rate between FY25 and FY28, and turn Ebitda-profitable by FY27, IIFL said.While acknowledging Swiggy lags behind market leader Zomato (now Eternal) by 7–8 quarters in both gross order value and Ebitda margins, the brokerage said this is due to slower execution in the past rather than a competitive disadvantage.'Swiggy's market share shrunk from 46.5% in FY22 to 42.4% in 1QFY25. We believe this was largely on account of execution issues rather than any competitive disadvantage,' IIFL added.Swiggy has begun regaining lost ground through improved execution and initiatives such as Bolt, its 10-minute delivery service, which now contributes 12% of order volumes. The platform is estimated to hold a 43% share in India's food delivery market, which IIFL expects to remain a stable duopoly.IIFL projects the food delivery vertical to grow at 18% CAGR over FY25–28, with Adjusted Ebitda margins expanding to 20% by FY28. Swiggy's contribution margin has already risen from 7.1% of gross order value (GOV) in FY25 to 7.8% in the March quarter, aided by better monetisation, higher ad revenues, and cost optimisation.'We expect Ebitda margins approaching ~5% of GOV by FY28 and stabilising at those levels in the long term,' IIFL said.Swiggy's food delivery business has been valued at $8.5 billion by the brokerage. Given its market capitalisation of $10.3 billion, that implies the remaining value assigned to its quick commerce (QC) and other businesses is just $1.8 billion, an '88% discount to Blinkit despite being only about half its size,' IIFL noted. The brokerage said this valuation gap offers 'meaningful re-rating potential' if Swiggy executes well in QC.Thursday's gain extended Swiggy's one-month rally to 19%, with the stock up 7.5% over the past week and 7.5% in the last three months, though still down 33.7% over the past six months.From a technical standpoint, Swiggy is trading above all its key simple moving averages (5-day, 10-day, 20-day, 30-day, 50-day, and 100-day), signalling bullish momentum. The Relative Strength Index (RSI) stands at 62.4, below the overbought threshold of 70. Meanwhile, the MACD is at 9.1 and remains above both its centre and signal lines, a positive sign for the stock.IIFL flagged heightened competition and regulatory uncertainty as key risks to its investment thesis, but maintained a confident tone on Swiggy's long-term potential: 'The stock currently trades at 4.1x FY26 estimated EV/Sales, well below Indian internet peers,' the brokerage said, adding that it expects this discount to narrow as Swiggy scales profitably across verticals.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Hans India

27 minutes ago

• Hans India

Centre unveils Rs 2.3 crore startup challenge to boost renewable energy innovation

New Delhi: The government on Saturday launched an innovative 'Start-Up Challenge' with a total prize pool of Rs 2.3 crore to accelerate rooftop solar and distributed renewable energy innovations in the country. The selected innovators will compete for Rs 2.3 crore, including Rs 1 crore for first prize, Rs 50 lakh for second prize, Rs 30 lakh for third prize, and 10 consolation prizes of Rs 5 lakh each. Last sate for application is August 20 and the result will be announced on September 10. Winners will also gain incubation support, pilot implementation opportunities, and mentorship from domain experts and investors, facilitated by MNRE and NISE, according to a Ministry of New and Renewable Energy statement. The unique national innovation challenge aims to identify and support breakthrough solutions for India's rooftop solar and distributed energy ecosystem. It is being implemented under the aegis of MNRE with support from the National Institute of Solar Energy (NISE), and in coordination with StartUp India, DPIIT. The Start-Up Challenge seeks applications from innovators and startups in India, focusing on four key categories to boost renewable energy adoption. These are affordability – making rooftop solar affordable for low- and middle-income households using innovative financing, modular systems, and circular economy strategies. Resilience is another category, to enhance climate resilience, grid stability, and cybersecurity in solar infrastructure, especially for vulnerable and remote areas. Inclusivity – expanding access to underserved communities through community solar, virtual net metering, and inclusive financing models, and 'environmental sustainability' – promoting eco-friendly technologies such as solar panel recycling, land-neutral solar deployment, and hybrid clean energy models, are the last two categories. The challenge welcomes a wide range of startups in green tech, IoT, AI, blockchain, construction, energy hardware, fintech, and waste management.

The Print

32 minutes ago

• The Print

Gold declines Rs 600 to Rs 99,960/10 g; silver plunges Rs 2,000/kg

Gold of 99.5 per cent purity dipped Rs 550 to Rs 99,250 per 10 grams (inclusive of all taxes). The yellow metal had closed at Rs 99,800 per 10 grams on Thursday. The precious metal of 99.9 per cent purity had settled at Rs 1,00,560 per 10 grams in the previous market session. New Delhi, Jun 20 (PTI) Gold prices slipped below the Rs 1 lakh-mark, falling Rs 600 to Rs 99,960 per 10 grams in the national capital on Friday due to selling by jewellers and stockists in line with weak global cues, according to the All India Sarafa Association. Silver prices also diminished Rs 2,000 to Rs 1,05,200 per kilogram (inclusive of all taxes) on Friday. It had ended at Rs 1,07,200 per kg on Thursday. 'Silver slid from recent highs, nearing one-week lows and heading for their first weekly decline in three weeks. It fell below USD 35.70 per ounce after a sharp rally earlier in the week. 'The decline came as investors liquidated positions in bullion to cover losses elsewhere amid rising geopolitical tensions between Israel and Iran,' Rahul Kalantri, Vice-President, Commodities at Mehta Equities, said. The Bank of England on Thursday also held rates steady in its monetary policy meetings, which also limited gains of precious metals. However, intensifying conflict between Israel and Iran, and weakness in the rupee is also supporting prices of gold and silver in the domestic markets, Kalantri said. On the global market, spot gold was trading at USD 3,353.67, lower by USD 16.72 per ounce, or 0.5 per cent. Spot silver fell 0.77 per cent to USD 36.10 per ounce in the overseas markets. 'Traders will watch developments on US trade tariffs and Middle East military engagement will drive volatility. Any signs of de-escalation or non-involvement from the US in the Iran-Israel conflict could keep gold under pressure. 'On the other side, renewed tensions will continue to support prices,' Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said. PTI HG HG TRB BAL This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.

Business Standard

36 minutes ago

• Business Standard

Genpact's 10-hour workday sparks employee outrage, online backlash grows

In the middle of ongoing global debates around work-life balance, Genpact, a major player in the technology and services sector, finds itself at the centre of a storm. The company has introduced a controversial new policy mandating a 10-hour workday, which officially came into effect in mid-June. But what has truly sparked uproar is not just the extended hours — it's the lack of clarity, communication, and any meaningful increase in base pay. According to a report by The Hindu, Genpact's internal system will now track employees' daily active hours through a proprietary productivity portal. Those who meet the 10-hour threshold can earn up to 500 points a month, translating to Rs 3,000 in incentives. However, for any time logged beyond the mandatory 10 hours, employees are rewarded with only a marginal 5 per cent bonus — about Rs 150. There is no revision in base salary despite the extended hours. The policy has caused widespread unrest, particularly in the company's Hyderabad office, where the atmosphere is reportedly 'tense' and morale is taking a hit. The bigger issue, employees say, lies in how the new rules were communicated or rather, weren't. 'There's nothing on paper. It's all word of mouth. If anyone challenges it, they're accused of being difficult and risk termination,' said a senior recruitment staff member to The Hindu. The absence of an official HR circular has only deepened the confusion, with managers and team leads passing on the policy informally. The backlash has spilled over onto social media. Employees have taken to social media platforms to express concerns about the long-term effects of such a policy on mental health and workplace culture. Abhishek Sharma, assistant manager at Genpact, voiced his opinion in a widely shared post: '#For10HrLogin – Is this the new standard or a step backward? As professionals striving for excellence, we're no strangers to going the extra mile. But mandating a 10-hour login raises some important questions about work-life balance, productivity, and mental health… Extended login hours can lead to burnout, reduced creativity, and disengagement. I urge leadership to reconsider – is this sustainable, and is it truly what drives growth?' Others have echoed this frustration online. On X, a user wrote: 'Wow @Genpact really said, 'Forget a life outside work!' With 70 per cent of employees earning under 10Lakh/year, they've now blessed you with a 10-hour workday. Add Bangalore's 3-4 hour traffic jam, and poof—14 hours of your day gone! Marriage? Kids? Nah, Genpact's your soulmate now.' The criticism hasn't stopped there. On Reddit, a user called the move 'absolutely pathetic' and pointed out that, 'the company increased working hours to 10, without increasing salary.' The same user added that employees must now meet 'WAM' — a tool that reportedly tracks keystrokes and activity in detail.