Now Reading: Swiggy shares jump nearly 5% after Jefferies ‘Buy’ rating
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Swiggy shares jump nearly 5% after Jefferies ‘Buy’ rating
Shares of Swiggy surged nearly 5% to an intraday high of Rs 285.35 on the BSE on August 20, after brokerage Jefferies initiated a 'Buy' rating with a target price of Rs…
Shares of Swiggy surged nearly 5% to an intraday high of Rs 285.35 on the BSE on August 20, after brokerage Jefferies initiated a 'Buy' rating with a target price of Rs 435 per share, implying a 60% upside. The stock pared gains to close 2.7% higher at Rs 279.75.
The positive outlook follows shareholder approval of a 49.5% cap on aggregate foreign ownership, a move that brings Swiggy closer to becoming an Indian-owned and controlled company (IOCC) under FEMA. More than 99.9% of shareholders voted in favour at the annual general meeting.
Jefferies said the IOCC status supports Swiggy's plan to transition its quick commerce arm Instamart to an inventory-led model, which could improve margins by 80 basis points. Swiggy's Q1 results showed food delivery revenue up 23% to Rs 2,208 crore and Instamart revenue up 53% to Rs 1,232 crore.
Indian Opinion Analysis
Swiggy's successful shareholder vote on the foreign ownership cap, after a failed attempt in May, removes a key regulatory hurdle. The shift to an inventory-led model at Instamart lets Swiggy control margins more directly, similar to what rival Zomato (Eternal) did after becoming an IOCC. The real test will be whether Instamart can narrow its Rs 651 crore quarterly loss while scaling. Watch for the timeline of FEMA approval and any passive foreign investor outflows in the coming weeks.
Source: inc42.com
This story was synthesised by AI from the source linked above.
