Swiggy stock rises 6%, market cap crosses Rs 1 lakh crore; here' why

Shares of food delivery and quick commerce major Swiggy Limited rose over 6% in early deals on Tuesday after global brokerage UBS initiated coverage on the counter with a 'buy' call citing robust growth prospects for the company.

It assigned a target price of Rs 515 to the stock. 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.

Swiggy stock rose 6.20% to Rs 458 against the previous close of Rs 431.25 on BSE. Market cap of the firm climbed to Rs 1 lakh crore. 

Total 4.96 lakh shares of the firm changed hands amounting to a turnover of Rs 22.11 crore on BSE. 

The global brokerage said in the online food delivery (OFD) segment, Swiggy is narrowing the gap with Zomato in terms of margins and scale. In the quick commerce (q-com) space, Swiggy has shown encouraging signs but has areas for improvement. The international brokerage remains optimistic about Swiggy’s prospects, seeing significant growth potential in the evolving market.

On the other hand, global brokerage firm Macquarie is bearish on the outlook of the stock. It has initiated coverage on the Swiggy stock with an 'underperform' stance. The brokerage has assigned a price target of Rs 325 per share adding that Swiggy has a significant growth runway ahead, though its journey to profitability may be challenging and uneven.

The Swiggy stock made its market debut on November 13, listing at a premium of 5.5 percent to the issue price. The IPO worth Rs 11,327-crore was fully subscribed on the final day of the share sale as investors purchased 3.59 times the portion reserved for them.

Swiggy is engaged in the business of inter alia, general carriers and providing delivery services through mobile based application and web enabled services and to collect, consign, distribute, transfer and deliver goods through various carriers.