Chennai, December 19, 2024 – Shares of food delivery powerhouse Swiggy witnessed a notable uptick of 1.7% today, reaching Rs 587.30 on the BSE, following JP Morgan’s bullish coverage initiation. The global investment firm’s ‘overweight’ rating and ambitious target price of Rs 730 highlights Swiggy’s emerging position as a formidable player in India’s local services landscape, particularly significant for its expanding presence in Tamil Nadu’s competitive delivery market.
The positive market response comes as JP Morgan identifies Swiggy as an “underappreciated dark horse” in the Indian local services ecosystem, emphasizing the company’s enhanced execution capabilities in both food delivery and quick commerce segments. This development holds particular significance for Tamil Nadu’s startup ecosystem, where Swiggy has been actively strengthening its operational footprint.
JP Morgan’s comprehensive analysis projects significant growth potential for Swiggy between FY25 and FY28, anticipating the company to achieve critical scale across its core businesses while outperforming competitors in profitability expansion. The investment firm’s research highlights a compelling valuation opportunity, noting that Swiggy currently trades at a 32-42% discount compared to its primary competitor, Zomato.
“The current market valuation significantly underestimates Swiggy’s potential and operational improvements,” says Rajesh Kumar, Senior Market Analyst at MarketScope India. “The company’s strategic focus on operational efficiency, particularly in key markets like Tamil Nadu, positions it strongly for sustainable growth.”
In parallel with JP Morgan’s analysis, domestic brokerage firm Axis Capital has also initiated coverage with a ‘buy’ rating and a Rs 640 target price. Their assessment underscores the substantial growth runway in both food delivery and quick commerce sectors, highlighting India’s current market underpenetration.
Key statistics support these bullish projections:
- Current trading price: Rs 587.30
- JP Morgan target price: Rs 730 (26.5% upside potential)
- Market discount versus competitors: 32-42%
- Axis Capital target price: Rs 640
For Tamil Nadu’s startup ecosystem, this development carries significant implications. The state, known for its vibrant food tech scene, has been a crucial market for Swiggy’s expansion strategy. The company’s strengthened position could catalyze increased investment in local logistics infrastructure and create new opportunities for regional cloud kitchen partnerships.
“Swiggy’s growth trajectory and operational improvements are particularly encouraging for Tamil Nadu’s tech ecosystem,” notes Dr. Lakshmi Subramanian, Director of the Chennai Startup Hub. “Their success demonstrates the potential for tech-enabled businesses to scale effectively in our market, potentially attracting more venture capital to the region.”
The company’s focus on innovation and cost control, coupled with its ambitious store expansion targets in quick commerce, positions it favorably for sustained growth. This strategic direction aligns well with Tamil Nadu’s digital transformation goals and could serve as a blueprint for other local startups in the logistics and delivery space.
