Leading food delivery platform Swiggy has received a ‘Subscribe’ rating from Mehta Equities Ltd for its IPO, with the brokerage citing improved financials and market expansion as key factors.
The company, valued at ₹87,299 crore at the upper price band of ₹390 per share, has demonstrated significant financial improvement by reducing its losses from ₹4,179.31 crore in FY2023 to ₹2,350.24 crore in FY2024. Revenue growth remained strong at 44.9 per cent in FY2023 and 36.1 per cent in FY2024.
According to Rajan Shinde, Research Analyst at Mehta Equities, Swiggy’s market cap to sales ratio of 7.8x appears fairly valued compared to competitor Zomato. The company’s contribution margin has improved from -7.5% to -3.18 per cent within a year.
The brokerage report highlights Swiggy’s successful expansion into Tier 2 and Tier 3 cities, along with its diversification into groceries and medicines delivery. The unified app model has reportedly helped Swiggy achieve better efficiency in customer acquisition compared to competitors.
The IPO presents an opportunity to invest in India’s growing hyperlocal commerce sector, with Swiggy’s increasing dark store footprint and faster delivery times reinforcing its market position.