Swiggy shares zoomed 15% to hit record high level; more steam left?

Swiggy Ltd shares on Monday witnessed a sharp uptick as the stock surged 14.99 per cent to hit an all-time high of Rs 612.30. It eventually settled 11.70 per cent at Rs 594.80. At this price, the recently-listed counter has rallied 52.51 per cent compared to its issue price of Rs 390.

Axis Securities initiated coverage on the stock with a 'Buy' call and a target price of Rs 640. "Swiggy presents a compelling investment opportunity to gain exposure to e-commerce in India, as the second-largest q-com and food-delivery player. We initiate with a 'Buy' rating and a SoTP-based target price of Rs 640. Our price target implies a March 2027E EV/sales of 5.3 times, which is at a 27 per cent discount to Zomato's consolidated EV/sales of 7.2 times. The discount is justified, in our view, given Swiggy's smaller scale and delayed profitability," the domestic brokerage stated.

It added that the 'Buy' call on Swiggy is based on the fact that its key segments food delivery and quick-commerce (q-com) remain relatively underpenetrated and have a long runway of growth.

Axis Sec highlighted Swiggy as a good 'ideator', among the first in food delivery and quick commerce spaces. "Swiggy has restructured its organization over the past few years, shifting from a pre-dominantly founder-led to a professionally led model. Its propensity to innovate and strengthened management team should help it remain one of the leaders in its business segments," the broking firm further stated.

Swiggy Instamart (its q-com business) has set ambitious targets for footprint expansion, which should help it meaningfully accelerate gross order value (GOV) and topline growth.

"Technically, The overall trend is positive. Support on the counter will be in the Rs 573-578 range where investors should maintain stop loss. On the higher end, Swiggy has potential to see Rs 640 level in the near term," Brijesh Singh of StockAxis told Business Today.

The stock saw heavy trading volume on BSE as around 32.59 lakh shares changed hands today. The figure was higher than the two-week average volume of 11.55 lakh shares. Turnover on the counter came at Rs 185.82 crore, commanding a market capitalisation (m-cap) of Rs 1,33,142.85 crore.