Swiggy Share Price Target: UBS Gives Maiden Buy Rating - What's Driving Growth

Shares of food delivery giant, Swiggy Limited, soared over 6 per cent to Rs 456 in morning trade on November 27, 2024. At the time of this report, the Swiggy stock had risen 6.2 per cent to Rs 458, bringing the company’s market capitalization to Rs 1 lakh crore or 10.5 Bn USD.

Meanwhile, global financial services firm UBS has given a 'buy' rating for Swiggy stock. This is the first time that UBS has given a rating on Swiggy stock.  

Swiggy Share Price Today: What Does UBS Say? Fundamentals Of Swiggy Stock

In a client note on the Swiggy stock UBS said, "We believe Swiggy is well positioned to benefit from the rapid growth in India's food
delivery and quick commerce markets with an estimated Gross Merchandise Value (GMV) and revenue CAGR of 35% and 29% over FY24-27e."

Swiggy Share Price Target

On November 22, when Swiggy shares were trading at Rs 416.25, the target price for Swiggy shares was Rs 515.

Swiggy share price today: What UBS says

According to the UBS note, 'Swiggy is scaling without sacrificing on margins, despite a slower Tier-2 expansion'. UBS said, "We estimate Swiggy's OFD GMV growth over FY24-27e to be broadly similar to Zomato's (low-20s) with adjusted EBITDA margin reaching 2.8 per cent by FY27e."

The share growth is also because of Swiggy's investment in infrastructure, which can boost productivity. "Swiggy has made infrastructure changes in line with the evolving
market: a total of 276 dark stores shut in FY23-Q1FY25, average size of dark store expanded from c2000 to c3000 sqft and densifying dark store footprint in urban centers."

UBS is optimistic about Swiggy overall, and said - "Yes, we estimate Swiggy's q-com GMV to grow at 52% CAGR over FY24-29e." Looking at the UBS analysis, it seems Swiggy is well positioned to improving its scale and margins, and share price.