Swiggy shares jump nearly 2% as JP Morgan initiates coverage, sets Rs 730 target

Shares of food-delivery company Swiggy surged 1.7% to their day’s high of Rs 587.30 on the BSE as the global brokerage firm JP Morgan has initiated coverage on the stock with an ‘overweight’ rating and a target price of Rs 730.

This indicates an upside potential of 26.5% for the stock from the current levels.

The global brokerage firm has highlighted Swiggy’s position as a "dark horse" in India's local services landscape and sees a significant growth potential for Swiggy, emphasizing the company's renewed focus and improved execution in both food delivery (FD) and quick commerce (QC).

JPMorgan projects that Swiggy will achieve critical scale across its core businesses, outperforming its peers in profitability expansion between FY25 and FY28. This confidence stems from Swiggy’s ability to enhance operational efficiency while driving robust growth in its key segments.

It has also been noted that Swiggy currently trades at a 32-42% discount compared to Zomato, a valuation that JPMorgan believes is overly pessimistic, a disparity, which could provide investors with a lucrative entry point as Swiggy strengthens its market position.

Additionally, JPMorgan sees Swiggy as an underappreciated winner in the Indian local services ecosystem, underscoring its potential to emerge as a major player in the space.

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Recently, domestic brokerage firm Axis Capital had also initiated coverage on Swiggy with a ‘buy’ rating and a target price of Rs 640, stating that Swiggy is in second place but is still in the race.

“Compelling investment opportunity as India's second-largest Q-com/food-delivery player as the food-delivery and Q-com businesses remain underpenetrated, with a long growth runway,” said Axis Capital in its note.

Swiggy's ambitious store expansion targets in Q-com should aid its GOV/top line growth while its cost-control is also improving. Swiggy's ideation and innovation abilities and strengthened leadership team should help it stay a market leader, the brokerage firm added.

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