Swiggy Buy Call: Nomura Sets Rs 550 Target Price
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Nomura Initiates ‘Buy’ Rating for Swiggy, Citing Undervalued Quick Commerce Business
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Global brokerage Nomura has initiated a ‘Buy’ rating for Swiggy, India’s leading food delivery and quick commerce platform, with a target price of ₹550. The report highlights the potential of Swiggy’s quick commerce (QC) business, currently undervalued by the market.
Updated: September 8, 2025, 04:58:10 AM
Nomura’s Rationale: Quick Commerce as a Key Growth Driver
Nomura’s report, released on September 2, 2024, argues that Swiggy’s quick commerce business, Instamart, is significantly undervalued compared to its competitor, Eternal. The brokerage estimates Swiggy’s QC business is valued at 0.3x EV/GOV (Enterprise Value to Gross Order Value),while Eternal is valued at 0.9x EV/GOV. Swiggy’s stock performance has been closely watched by analysts.
Abhishek Bhandari, a representative from Swiggy, acknowledged the competitive pressures in the quick commerce space, noting that aggressive expansion by other players could perhaps delay the company’s path to profitability. However, he emphasized that disciplined execution and increased visibility on achieving breakeven are key catalysts for future stock performance.
Understanding EV/GOV: A Key Metric for Quick Commerce
EV/GOV is a crucial valuation metric for quick commerce companies. It compares a company’s enterprise value (market capitalization plus debt, minus cash) to its gross order value (the total value of all orders placed on the platform). A lower EV/GOV ratio generally suggests the company is undervalued relative to its sales volume.
Analysts use EV/GOV to assess the potential for growth and profitability in the quick commerce sector. A higher ratio indicates investors are willing to pay more for each unit of gross order value, reflecting expectations of strong future performance.
Swiggy’s Business Overview
swiggy, founded in 2014, has become a dominant force in India’s food delivery and quick commerce markets. The company operates two primary businesses:
- Food Delivery: Swiggy connects customers with local restaurants, offering a wide range of cuisines and delivery options.
- Instamart (Quick commerce): Instamart delivers groceries and essential items in under 30 minutes, competing with players like Blinkit (formerly Grofers) and Zepto.
In addition to these core businesses,Swiggy also offers services like Swiggy Genie (package delivery) and Swiggy Diner (dining-out reservations).
Competitive Landscape in India’s Quick Commerce Market
india’s quick commerce market