Swiggy Shares Surge 6% on UBS ‘Buy’ Call, 26% Upside Potential
Swiggy Limited saw its shares climb 6% to Rs 456 in early trading on November 26 after UBS initiated coverage with a ‘buy’ rating. The brokerage has set a target price of Rs 515, indicating a potential upside of nearly 27% from the current levels.
UBS highlighted Swiggy’s impressive growth trajectory, particularly in the online food delivery (OFD) segment, where it is narrowing the margin and scale gap with competitor Zomato. Moreover, the brokerage noted that Swiggy is currently trading at a 35% discount to Zomato, adding to its attractiveness for investors.
In the quick commerce (q-com) space, Swiggy has shown promising signs of growth but still faces challenges in optimizing this segment. Despite this, UBS remains optimistic about the company’s prospects in the evolving market.
Swiggy made its stock market debut on November 13, listing at a 5.5% premium over its issue price. Its Rs 11,327-crore IPO was fully subscribed, with investors bidding 3.59 times the reserved portion.
However, not all brokerages are on the same page. Analysts at Macquarie have given Swiggy an ‘underperform’ rating, setting a target price of Rs 325. While acknowledging Swiggy’s growth potential, Macquarie raised concerns about its profitability journey, predicting a challenging and uneven path ahead.
As of 9:50 AM on November 26, Swiggy shares were trading at Rs 444 on the NSE, reflecting a 3% intraday gain. Over the past week, the stock has recorded an 8% uptick, signaling strong investor interest.
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