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On Tuesday, Morgan Stanley (NYSE:MS) analysts initiated coverage on Swiggy Ltd (SWIGGY:IN) with an Overweight rating and set a price target of INR405.00. The analysts expressed optimism about Swiggy’s potential growth in both the food delivery and quick commerce sectors.
The analysts forecast that Swiggy’s food delivery business will grow at a compound annual growth rate (CAGR) of 15.8% from fiscal year 2025 to 2028. They also anticipate that Swiggy will achieve an adjusted EBITDA margin of 4.8% by fiscal year 2028, compared to over 6% for Eternal, a key competitor.
In the quick commerce segment, Morgan Stanley predicts that Swiggy’s aggressive infrastructure investments will help it regain market share and increase its gross order value by 63% CAGR over the same period. However, the analysts noted a significant difference in margin structure compared to Eternal’s Blinkit, with Swiggy expected to have a 2.6% margin by fiscal year 2031.
Morgan Stanley’s analysis values Swiggy’s food delivery business at approximately 52% of the value assigned to Eternal’s Zomato (NSE:ETEA), and the quick commerce business at about 25% of Eternal’s valuation. The analysts estimate Swiggy is two years behind Eternal in adjusted EBITDA and has a 15% lower market share in food delivery.
Overall, Morgan Stanley’s price target for Swiggy implies an enterprise value to adjusted revenue multiple of 3.1 times for fiscal year 2027, which represents a 51% discount to Eternal.
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