Swiggy’s Comeback Begins – IIFL Puts ₹535 Target on Swiggy
Is This the Best Time to Buy Swiggy Stock? Swiggy, India’s second-largest food delivery platform, has received a bullish endorsement from IIFL Capital, which initiated coverage with a ‘Buy’ rating and a target price of ₹535 — implying a potential upside of nearly 50% from the current market price of ₹355.9.
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IIFL’s report emphasizes Swiggy’s improving operational efficiency, strong food delivery presence, and significant growth potential in quick commerce (QC) as the primary reasons behind the positive outlook.
Strong Growth Forecasts and Quick Commerce Boom
According to IIFL’s projections, Swiggy is expected to post a 28% compound annual growth rate (CAGR) in revenue between FY25 and FY28. The platform is also projected to achieve Ebitda-level profitability by FY27, with notable margin expansion across both its food delivery and QC divisions.
Quick commerce, which includes Swiggy’s 10-minute delivery service ‘Bolt,’ is poised to grow more than 4x by FY28. Bolt alone now accounts for approximately 12% of total order volumes.
Behind Zomato, But Catching Up
Despite currently lagging behind Zomato in terms of market share and order volume, Swiggy is making a strong comeback. While Swiggy’s market share dropped from 46.5% in FY22 to 42.4% in Q1 FY25, IIFL attributes this dip to “execution issues rather than a competitive disadvantage.”
In fact, the brokerage suggests that Swiggy’s recent improvements in execution are beginning to reverse this trend. The company is estimated to now hold a 43% market share, indicating a stabilising duopoly in India’s food delivery sector.
Margins on the Rise
Swiggy’s contribution margin improved to 7.8% in Q4 FY25, up from 7.1% for the full fiscal year, supported by better monetisation, increased advertising revenue, and enhanced cost controls. The food delivery business is forecasted to grow at an 18% CAGR through FY28, with adjusted Ebitda margins expected to touch 20%.
IIFL sees long-term Ebitda margins stabilising at around 5% of gross order value (GOV).
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