On November 26, 2024, Swiggy's shares surged by 6% to Rs 456 following a "buy" recommendation from UBS, a major international brokerage. The firm set a target price of Rs 515, indicating a potential upside of nearly 27% from the current levels.
UBS's optimism is rooted in Swiggy's improved margins and scalability, which have allowed the company to close the gap with its main competitor, Zomato. The brokerage also highlighted strong growth prospects in Swiggy's quick commerce segment, which focuses on delivering goods within 30 minutes.
Swiggy's initial public offering (IPO) on November 13, 2024, was fully subscribed, with shares debuting at a 5.5% premium. Investors purchased 3.59 times the reserved portion, reflecting confidence in the company's future.
Currently trading at a 35% discount to Zomato, UBS views this as a unique investment opportunity. Swiggy's loyal customer base and competitive pricing strategy position it well for sustained growth in both online food delivery and quick commerce markets.
The recent rally in Swiggy's stock price underscores its potential for future gains, making it an attractive option for investors as it continues to expand its market share.