Shares of food delivery and quick commerce major Swiggy Limited rallied 6 percent to Rs 456 in morning trade on November 26 after UBS initiated coverage on the counter with a 'buy' recommendation citing robust growth prospects for the company.
With a 'buy' rating and a target price of Rs 515, the brokerage forecasts a nearly 27 percent upside from the current closing levels on the exchanges. The brokerage highlights that Swiggy is well-positioned for growth, currently trading at a 35 percent discount to Zomato.
Follow our LIVE blog for all the latest market updates
UBS says that in the online food delivery (OFD) segment, Swiggy is narrowing the gap with Zomato in terms of margins and scale. Meanwhile, in the quick commerce (q-com) space, Swiggy has shown encouraging signs but still has areas for improvement. The international brokerage remains optimistic about Swiggy’s prospects, seeing significant growth potential in the evolving market.
The company made its stock market debut on November 13 and listed a premium of 5.5 percent from the issue price. The Rs 11,327-crore initial public offer of Swiggy was fully subscribed on the final day of the share sale as investors purchased 3.59 times the portion reserved for them.
Meanwhile, analysts at the global brokerage firm Macquarie initiated coverage on Swiggy shares with an 'underperform' rating, recommending a price target of Rs 325 per share. The foreign brokerage believes that Swiggy has a significant growth runway ahead, though its journey to profitability may be challenging and uneven.
At about 9:50 am, shares of the company were trading at Rs 444, higher by 3 percent from the last close on the NSE. Swiggy shares have gained 8 percent in the past week.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
