Swiggy shares jump 5.1%, IIFL sets Rs 535 target citing 46% upside

Shares of Swiggy, India’s second-largest foodtech platform, rose as much as 5.1 per cent on Thursday to Rs 383.80 on the BSE, extending their two-day rally to 7.9 per cent. The gains came after brokerage IIFL Capital initiated coverage with a ‘buy’ rating, citing robust growth potential in both its food delivery and quick commerce verticals.

IIFL set a target price of Rs 535 for Swiggy, implying a 46 per cent upside from Wednesday’s closing price. The brokerage highlighted Swiggy’s improving execution, strengthening position in food delivery, and undervalued quick commerce business as key growth drivers.

Swiggy’s market share has slipped in recent quarters—from 46.5 per cent in FY22 to 42.4 per cent in the first quarter of FY25—mainly due to execution challenges. However, IIFL believes the company is poised for a turnaround and forecasts a 28 per cent compound annual revenue growth rate between FY25 and FY28, with Ebitda profitability expected by FY27.

The company’s quick commerce arm is seeing traction with initiatives like ‘Bolt’, its 10-minute delivery service, which now contributes 12 per cent of order volumes. Swiggy currently holds a 43 per cent share in India’s food delivery market, which IIFL expects to remain a stable duopoly. The brokerage estimates the food delivery segment will grow at an 18 per cent CAGR over FY25–28, with adjusted Ebitda margins reaching 20 per cent by FY28.

Swiggy’s contribution margin improved from 7.1 per cent of gross order value (GOV) in FY25 to 7.8 per cent in the March quarter, supported by higher ad revenues and cost efficiency. IIFL values the food delivery business at USD 8.5 billion. With Swiggy’s total market capitalisation at USD 10.3 billion, the implied value of its quick commerce and other units is just USD 1.8 billion—an 88 per cent discount to Blinkit, despite being about half its size. IIFL sees this as offering substantial re-rating potential if Swiggy executes well in the QC segment.

Technically, the stock remains bullish, trading above all major moving averages. It has gained 19 per cent over the past month, with the Relative Strength Index at 62.4—below the overbought threshold of 70. The MACD remains in positive territory.

IIFL flagged rising competition and regulatory risks but said Swiggy’s long-term prospects remain strong. The stock trades at 4.1x FY26 estimated EV/Sales, lower than most Indian internet peers—a valuation gap the brokerage expects to close as Swiggy scales profitably.