Shares of Swiggy Ltd rose 3% in Monday’s trading session, driven by positive market sentiment around upcoming GST clarifications for Electronic Commerce Operators (ECOs) like Swiggy and Zomato. The report, published by Business Today, hinted at potential changes to input tax credit rules, which could benefit the operational efficiency of these companies.
In addition to the GST clarification, the stock received a boost as Axis Securities initiated coverage on Swiggy with a ‘Buy’ rating, setting a target price of Rs 640. The brokerage highlighted Swiggy’s 27% valuation discount compared to its peer Zomato as a key factor that makes the stock an attractive investment opportunity.
Swiggy’s valuation discount, coupled with its consistent expansion in food delivery and quick commerce, positions it as a strong contender in the growing online food delivery market. Analysts believe the company’s innovative approach, coupled with strong customer retention strategies, makes it well-poised for long-term growth.
Axis Securities emphasized Swiggy’s diversified revenue streams, including its quick-commerce platform Instamart, as a competitive edge. The firm noted that Swiggy’s operational efficiencies and strategic focus on profitability give it an edge in a highly competitive sector, further strengthening its investment appeal.
With favorable market conditions, expected policy clarity, and Swiggy’s strategic growth initiatives, analysts see significant upside potential for the stock. The combination of robust fundamentals and valuation advantage over Zomato makes Swiggy a compelling ‘Buy’ for investors seeking long-term gains in the dynamic food-tech industry.
