Buy Swiggy; target of Rs 280: Motilal Oswal

Moneycontrol • 9 days ago

Original source

Key Investment Pillars

  • Swiggy's food delivery business is expected to grow at 18-20% YoY, driven by its strong brand recall and expanding user base.
  • Instamart, Swiggy's quick commerce arm, is expected to achieve double-digit QoQ growth, with a focus on improving contribution margins.
  • The company's out-of-home consumption business is expected to remain EBITDA positive, driven by its growing network of restaurants and increasing demand.
  • Swiggy's management is focused on achieving a clear path to EBITDA profitability, particularly in its quick commerce business, which is critical for a meaningful re-rating.

Thesis Validation Checklist

  • Monitor Swiggy's food delivery growth and its ability to maintain market share.
  • Track Instamart's QoQ growth and contribution margin improvement.
  • Watch for signs of operating leverage and margin expansion in the out-of-home consumption business.
  • Evaluate the company's progress toward achieving EBITDA profitability, particularly in its quick commerce business.