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HDFC Securities Report
HDFC Securities believes protecting food delivery cash flows and reducing quick commerce losses will be critical for Swiggy to narrow its valuation gap with the market leader. The brokerage noted that there are low‑hanging operational efficiencies that could help Swiggy achieve contribution margin break‑even in quick commerce.
Following a ~37% correction in the stock price over the past six months, Swiggy's valuation has become increasingly attractive. According to HDFC Securities, the stock is now trading at around 32x FY28 FD EV/EBITDA, implying that the market is effectively assigning minimal value to its quick commerce (Instamart) and out‑of‑home businesses.
The brokerage also highlighted Swiggy's strong balance sheet, with a cash pile of Rs 1,590 crore, alongside improving food delivery cash flows, which provides additional downside protection and financial flexibility.
HDFC Securities remains constructive on Swiggy's medium‑term outlook and has reiterated its Buy recommendation with a sum‑of‑the‑parts‑based target price of Rs 460 per share. The valuation includes 40x March‑28 EV/Ebitda for the food delivery business and 0.6x March‑28 net order value for Instamart.
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