Swiggy shares: Anand Rathi upgrades food delivery stock to 'buy' giving 3 reasons
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- ✓Anand Rathi upgraded Swiggy shares to ‘buy’ with a target price of ₹310.
- ✓The firm said, “We expect this to unlock Rs4-5/order in contribution margin translating to ~80-100bps of margin benefit.” Swiggy now focuses on profitability over growth, using its existing network to improve margins instead of adding more stores.
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- MARKET
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- India Economy
Swiggy share price: Brokerage firm Anand Rathi has upgraded the quick food delivery stock Swiggy to ‘buy’, while keeping target price unchanged at ₹310. This valuation is based on 30 times the estimated adjusted EBITDA for FY28, after accounting for financial obligations, and reflects a valuation discount of around 15% compared with Zomato.
The brokerage firm further said that Swiggy is moving away from a business model where it had to sacrifice profitability to achieve faster growth. Over the past four quarters, the company has focused more on improving its contribution margin (CM) rather than pursuing growth at any cost. As a result, its contribution margin improved from a loss of around 5.6% in Q4FY25 to breaking even in Q1FY27. This signals a shift towards a business model where Swiggy can grow its business while also improving profitability.
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