Swiggy Shares Up 3% on Morgan Stanley 'Overweight' Rating

Shares of food delivery and quick commerce major Swiggy rose 3 percent to Rs 342 in morning trade on June 3 after global brokerage Morgan Stanley initiated coverage with an "overweight" rating, setting a price target of Rs 405 per share.

- TBG NETWORK

This implies a potential upside of 22 percent from the stock's last close and places the firm's target slightly above Swiggy's IPO price of Rs 390.

The investment thesis hinges on three key pillars: Swiggy's strengthening performance in food delivery, the large and growing addressable market in quick commerce, and a mismatch between investor assumptions on capital outlay versus topline growth.

According to the brokerage, the food delivery landscape in India is expected to remain a two-player arena. As Swiggy tightens its execution, Morgan Stanley believes the company could close the profitability gap with its rival, Eterna or Zomato, in this segment.