Nuvama Bullish on Swiggy: ‘Buy’ Rating with Rs 510 Target
Domestic brokerage Nuvama has initiated coverage on Swiggy with a ‘Buy’ recommendation and a 12-month target price of Rs 510, citing the platform’s dominance in India’s $7B+ food delivery market and accelerating quick-commerce growth through Instamart.
Key Drivers Behind Nuvama’s Optimism
- Food Delivery Leadership: 25-30% industry CAGR with Swiggy/Zomato duopoly
- Tier 2/3 Expansion: Rapid adoption in smaller cities boosting GOV (Gross Order Value)
- Profitability Gains: Improved unit economics via higher order frequency & Swiggy One subscriptions
- Quick-Commerce Potential: Instamart revenue growing 3x faster than core business
“Swiggy’s dual-engine model (food delivery + Instamart) provides structural advantages in India’s hyperlocal delivery boom,” Nuvama emphasized.
Swiggy vs Zomato: The Competitive Edge
| Metric | Swiggy Advantage |
|————–|———————————|
| Geography | Stronger brand recall in South |
| Efficiency| Better fleet utilization |
| Revenue | Diversified streams (ads, cloud kitchens)|
Risks to Monitor
- Regulatory changes (delivery fee caps)
- Blinkit/Zepto competition in quick-commerce
- Macroeconomic impact on discretionary spends
IPO Watch & Future Outlook
With a $10.7B private valuation, Swiggy’s potential 2025 IPO could mirror Zomato’s successful debut. Near-term milestones:
– Food delivery EBITDA breakeven
– Instamart’s expansion to 50+ cities
– Advertising revenue scaling
