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Investing.com - Bernstein has initiated coverage on Swiggy Ltd (NSE:SWIGGY) with an Outperform rating and a price target of IDR570.00, citing potential for growth despite the stock’s 24% decline year-to-date.
The research firm highlights Swiggy ’s clear number two position in food delivery, supported by market-share gaining initiatives like Bolt, 99 Store, and Toing, which should help the company outgrow competitor Zomato in the near term. Bernstein notes that Swiggy generates approximately $115 million per year in cash.
For Swiggy’s quick commerce business Instamart, Bernstein points out a differentiated strategy compared to competitor Blinkit, including larger stores, more non-grocery focus, private label products, and measured store ramp-up.
The firm believes the market consensus is building materially lower growth and margin profiles for Instamart due to winner-takes-all market hypothesis, with F30 consensus gross order value (GOV) for Instamart at approximately 70% of Blinkit but adjusted EBITDA only about 15% of Blinkit’s.
Bernstein’s outlook differs, projecting Instamart to reach approximately 65% of Blinkit’s size by GOV and about 30% by adjusted EBITDA by F30, with potential catalysts including progress on Swiggy’s recently announced qualified institutional placement and improvements in quick commerce profitability.
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