Thu Nov 14 13:35:25 UTC 2024: ## Swiggy Shares Dip After Strong Debut, Brokerage Views Mixed
**Mumbai, India:** Swiggy’s shares took a dip on its second day of trading, falling by 3.07% on the Bombay Stock Exchange. The decline comes after a strong debut on Wednesday, where the food delivery giant closed 10.67% higher than its initial listing price.
While the initial excitement has waned, analysts remain divided on Swiggy’s future prospects. HDFC Securities has initiated coverage with an ‘add’ rating and a target price of Rs 430, suggesting a potential 6% downside from its current closing price.
The brokerage highlights Swiggy’s slower growth compared to rival Zomato, particularly in its monthly transacting user (MTU) base, a crucial driver of gross order value (GOV). Swiggy’s Instamart service has also seen slower GOV growth than competitor Blinkit.
Despite these challenges, HDFC Securities expects Swiggy’s sales to grow at a 26% compound annual growth rate (CAGR) over FY24-27. They also anticipate an improvement in its adjusted EBITDA margin and return on capital employed (RoCE) by FY27.
Meanwhile, JM Financial remains bullish, issuing a ‘Buy’ rating with a target price of Rs 470. The brokerage emphasizes Swiggy’s growth potential and its strategic position in the fast-growing consumer space.
Overall, Swiggy’s path to profitability is expected to be challenging but achievable. The company is focused on increasing its GOV mix and achieving sustainable margins despite fierce competition from established players like Zomato.
First Piper 