The Secret Sauce Behind Morgan Stanley’s Swiggy Price Target
Brokerage firm Morgan Stanley has initiated coverage on Swiggy with an “overweight” rating as of Tuesday, June 3, signaling confidence in the food delivery giant’s growth potential. The firm has assigned a price target of ₹405 per share, indicating an upside of approximately 22% from Monday’s closing price of ₹333 and slightly above Swiggy’s IPO price of ₹390.
(ALSO READ: $27 Billion Heir Shravin Bharti Mittal Ditches UK—Is the Wealth Exodus Just Beginning?)
Swiggy Set for a Big Breakout?
Morgan Stanley’s positive outlook on Swiggy is built on three key factors: improving execution in its core food delivery business, expansion in the quick-commerce total addressable market (TAM), and aggressive investments by the company. The brokerage notes that while the market currently prices in steep investments, it does not adequately reflect the potential for topline growth.
The report highlights the dominance of the duopoly market in Indian food delivery, with Morgan Stanley expecting Swiggy to continue narrowing the margin gap with its chief rival, Zomato. If Swiggy maintains its market share, its quick-commerce TAM could grow substantially to $57 billion by 2030, driven largely by its Instamart service.
Valuations show Morgan Stanley placing Swiggy’s food delivery business at 25 times its adjusted EBITDA for the financial year 2028, representing a 5% discount compared to Zomato’s food delivery business. Meanwhile, Instamart, Swiggy’s quick-commerce vertical, is valued at 27 times adjusted EBITDA for financial year 2031, about 25% below Zomato’s Blinkit.
Among 21 analysts covering Swiggy, 15 maintain a “buy” rating, while three recommend “hold” and another three advise “sell.” Despite the optimistic analyst sentiment, Swiggy’s shares ended Monday largely unchanged at ₹333, below the IPO price, and have slipped 3% over the past month.
Morgan Stanley’s initiation of coverage with an “overweight” rating underscores the firm’s belief in Swiggy’s potential to capitalize on India’s growing food delivery and quick-commerce markets, suggesting a positive outlook for investors eyeing the company’s stock.
For ongoing coverage and the latest developments, stay with Newz24India.