Is it advisable to purchase shares of Eternal or Swiggy at this moment? Here's what the analysts predict.
Swiggy, India's leading food delivery platform, has seen a positive trend in its stock returns over the past few weeks and months. In the past week, Swiggy's stock returns stood at 4.06%, while over the past two weeks, the growth was slightly higher at 4.85%. Over the past six months, Swiggy's stock has shown a significant increase of 23.58%.
However, the past three years' performance and the share price target for the future are not provided in the available information.
The food delivery segment, known as FD, is on a steady growth path and improving profitability, according to brokerage reports. FD margins are expanding despite the GST on delivery charges, a testament to Swiggy's resilience.
Quick Commerce (QC), Swiggy's foray into the quick commerce space, is expected to contribute to margin expansion. The QC economics are set to improve via a mature store network, and the contribution margin is reportedly bottoming out. QC margins are expected to break-even in 2-4 quarters.
To further aid profitability, Swiggy is leveraging its marketing efforts. The company's strategy seems to be paying off, as the majority of FD orders come from loyalty subscribers.
In terms of investments, a stake sale for Rapido is on track for Swiggy. The details of this transaction are not disclosed.
Analysts currently recommend Swiggy positively, with MSCI including it in a leading index. The weighting of Eternal, another food delivery platform, is being reduced, but no specific current recommendation is mentioned for Zomato stocks in the search results.
Swiggy's medium-term adj. EBITDA margin target is set at 4-5 per cent. The company is also focusing on reducing cash burn by lowering dark-store capex and QC losses.
The broader market, as reflected by the BSE Sensex and BSE Consumer Discretionary indices, has seen modest growth over the past week, with returns of 0.85% and 2.99%, respectively.
Despite the positive outlook, the share price targets for Swiggy, Eternal, and Zomato are not provided in the available information.
