Swiggy share price rises over 6% after Q2 FY2025 results. Is it still a stock to buy today?

Swiggy’s share price rose over 6% on Wednesday after the food and grocery delivery company reported its earnings for the second quarter of fiscal 2025. Swiggy shares rose up to 6.69% ₹534.85 per piece on the BSE.

Newly listed company Swiggy reported strong revenue growth in the quarter ended September 2024 while reducing losses.

Swiggy’s operating revenue rose 30% in Q2FY25 ₹3,601.45 crore from ₹2,763.33 crore in the corresponding period last year. The company achieved sales of ₹3,222.2 crore in Q1FY25.

Swiggy’s consolidated net loss narrowed by 5% to 5% in July-September FY25 ₹625.5 crore from a loss of ₹657 crore in the same period last fiscal.

At the operational level, Swiggy’s EBITDA loss also declined in Q2FY25 ₹555 crore from ₹624 crore, year-on-year. The company’s monthly transactional users (MTU) increased 7% quarter-on-quarter and 19% year-on-year to 17.1 million.

Should you buy Swiggy stock?

JM Financial continues to value Swiggy’s food delivery business at 45x EV/FY27E Adj. EBITDA multiple. In Quick Commerce, the company now values ​​Instamart at 1.75x EV/FY27E GOV multiple versus 1.25x previously, as its growth profile and contribution margin profitability have improved, giving it more confidence in the company’s future prospects company there.

“We continue to believe that Swiggy and Zomato are well positioned to benefit from strong industry tailwinds for the hyperlocal delivery players. Even after the IPO, the balance sheet remains strong with a net cash position of ₹88 billion in September 2024,” JM Financial said.

The brokerage firm maintained its “Buy” rating on Swiggy shares and increased its price target to March 2026 ₹550 per share ₹470 earlier.

Brokerage firm Motilal Oswal Financial Services (MOFSL) expects Swiggy’s food delivery orders to grow at 12.5% ​​annually, with AOV growth of 1.4%, leading to GOV growth of 14.1% in fiscal year 24-37. Q-Commerce is expected to grow faster with a 23.6% annual increase in orders, AOV growth of 3.2% and GOV growth of 27.6%.

MOFSL expects Swiggy to report PAT margin of -16.1%, -3.9% and 1.8% in FY25, FY26 and FY27. It has a “Neutral” rating and a target price on Swiggy shares of ₹475 each.

Swiggy shares made a decent stock market debut on November 13 as the stock was listed at a premium of 5.64% to the issue price ₹412 apiece on the BSE. The major food delivery company’s shares have risen almost 30% from their list price. It reached a peak of ₹542.10 each on December 3rd.

At 12:10 pm, Swiggy shares were trading 2.54% higher ₹514.05 per piece on the BSE.

Disclaimer: The views and recommendations expressed above are those of individual analysts or brokerage firms and not of Mint. We recommend investors consult certified experts before making an investment decision.