Swiggy Gets 'Neutral' Rating From Motilal Oswal After Q2 Results, Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.We reiterate our Neutral rating on the stock. Our DCF-based valuation of Rs 475 suggests a 5% downside from the current price.Swiggy Ltd., through its innovation DNA, has played a pivotal role in effectively inventing both food delivery and quick commerce, leading the way in these categories. However, it has seen a decline in its lead in food delivery and is currently trailing behind its key rival, Blinkit, in quick commerce — both in terms of gross order value growth and profitability. While the Q-commerce race is only getting started, Swiggy’s re-rating depends on accelerating GOV growth, increasing AOVs, and improving execution in the Q-commerce business. We expect food delivery orders to grow at 12.5% annually with an average order value growth of 1.4%, leading to a GOV growth of 14.1% over FY24-37 (20.8% GOV CAGR over FY24-29). Q-commerce is expected to grow faster, with orders increasing at 23.6% annually, AOV growth at 3.2%, and GOV growth at 27.6% (59% GOV CAGR over FY24-29). Swiggy is expected to report PAT margin of -16.1%/-3.9%/1.8% in FY25/FY26/FY27. Our adjusted Ebitda remains unchanged; however, PAT has been impacted by increased ESOP expenses. .Swiggy delivered Rs 36.1 billion revenues in Q2 FY25, up 11.7% QoQ. The food delivery business’s gross order value grew 14.6% YoY, whereas the contribution margin stood at 6.6%, posting a slight expansion over the previous quarter. Food delivery’s adjusted Ebitda as a % of GOV margin was up 80 bp QoQ at 1.6%. Instamart’s GOV was Rs 33.8 billion (GOV up 24.1% QoQ/75.5% YoY), whereas the contribution margin was -1.9%. Adjusted Ebitda as a % of GOV was - 10.6%, an improvement of 110 bp QoQ. Overall, Swiggy reported a net loss of Rs 6.2 billion, marking a 4.7% YoY decline..Click on the attachment to read the full report:.Swiggy Q2 Results: Net Loss Stands At Rs 626 Crore.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Swiggy Gets 'Neutral' Rating From Motilal Oswal After Q2 Results, Here's Why

Swiggyreported a net loss of Rs 6.2 billion, marking a 4.7% YoY decline, adds the brokerage.

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Swiggy Gets 'Neutral' Rating From Motilal Oswal After Q2 Results, Here's Why

Swiggyreported a net loss of Rs 6.2 billion, marking a 4.7% YoY decline, adds the brokerage.

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