Buy Swiggy, target price Rs 740: ICICI Securities

ICICI Securities has a buy call on Swiggy Ltd. with a target price of Rs 740.0. The current market price of Swiggy is Rs 315.1.

Channel checks by ICICI Securities indicate waning competitive intensity in quick-commerce customer acquisition spends. Positive for medium-term margin outlook. As for E-commerce, given slowing growth in the overall e-commerce space over FY24 and FY25, companies are now looking at upping value proposition for price conscious consumers. Positive for overall shipment volumes; and ii) D2C brands and online platforms are trying to increase proportion of same day and next day elivery to bridge the gap in customer experience with quick commerce platforms. ICICI Securities maintains Swiggy as a top pick with meaningful upside from here.

Investment Rationale
ICICI Securities re-iterates its BUY call for Swiggy and maintain its three-stage DCF-based target price of Rs 740, assuming 11.5% WACC and 5% terminal growth. The risks include slowdown in discretionary spending and negative externalities disrupting business operations.