On Tuesday, CLSA initiated coverage on Swiggy Ltd (SWIGGY:IN), a prominent player in India's food delivery and quick commerce sectors, with an Outperform (2) rating and a price target of INR708.00. The research firm highlighted Swiggy's position as one of India's most innovative companies and its early entry into the market.
Swiggy is recognized for its significant growth potential within a vast Total (EPA:TTEF) Addressable Market (TAM) for food delivery and quick commerce. The firm anticipates Indian quick commerce to expand sixfold from the fiscal year 2024 to 2027, with Swiggy expected to be one of the primary beneficiaries of this growth.
The firm acknowledges Swiggy's accelerating growth and improving profitability as indicators of its execution prowess. Despite Swiggy's current position trailing behind its competitor Zomato (NS:ZOMT), CLSA believes that the market has already accounted for this difference.
The price target of INR708.00 suggests a 32% upside potential from Swiggy's current market price. CLSA's coverage initiation reflects a positive outlook on Swiggy's future performance in the rapidly expanding quick commerce space in India.
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