Swiggyβs muted debut on Dalal Street was marked by a small premium of 8% over its issue price. Investors are refraining from making bold bets on the stock since the company is currently loss-making at the consolidated level and is believed to be at least 2-3 years away from PAT level break-even.
βThe listing reflects a degree of optimism about Swiggy’s long-term growth prospects, driven by its strong brand recognition, extensive network, and dominant position in the food delivery market, said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, adding that βhowever, the company’s continued losses and the challenging market conditions may temper investor enthusiasm in the long term.β
Also read | Swiggy shares list at 8% premium over IPO price
Investors should approach Swiggy with a balanced perspective, considering the potential for future growth and the associated risks and those who are holding it may keep a stop at around the issue price, Nyati added.Brokerage Macquarie initiated coverage on the company and gave it an βUnderperformβ rating with a target price of Rs 325, highlighting the downside potential of 17% from IPO issue price of Rs 390.
Meanwhile, brokerage JM Financial gave Swiggy a βBuyβ rating with an upside potential of 21% and a target price of Rs 470.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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