Swiggy shares jump 6% as Bernstein initiates coverage with 'Outperform' rating

Shares of Swiggy Ltd picked up strong momentum in Thursday's trade, surged 6.13 per cent to hit a day high of Rs 520.70. The stock saw high trading volume on BSE as around 4.30 lakh shares were last seen changing hands. This figure was higher than the two-week average volume of 4.12 lakh shares. Turnover on the counter came at Rs 21.90 crore, commanding a market capitalisation (m-cap) of Rs 1,14,283.93 crore.

Today's upward move came after reports suggested that global brokerage Bernstein has initiated its coverage on Swiggy with an 'Outperform' rating. It has pegged the counter at a value of Rs 635 per cent.

Prior to this, CLSA -- a Hong Kong-based brokerage-- also started its coverage on Swiggy with an 'Outperform' call and a target price of Rs 708 in December last year.

Domestic brokerage Axis Securities also began 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 mentioned 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 growth runway.

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.

Separately, the Bengaluru-based food delivery giant has unveiled its latest innovation, 'Snacc', a standalone app designed to deliver snacks, beverages and quick meals within 10 to 15 minutes. Currently, the service is only available in select Bengaluru neighbourhoods only. Snacc caters to urban consumers seeking convenience and speed in their dining experiences.