The brokerage reiterated its “buy” rating on both, Swiggy and Zomato, with a price target of ₹740 and ₹310 per share respectively. Swiggy’s target implies a potential upside of 127%, while for Zomato, the upside potential is at 40%.
ICICI Securities wrote in its note that said ground-level checks suggest that item-level discounting is past its peak levels seen between November 2024 to January 2025 period. Even as discounts persist, the players are more focused on incentivising higher order values. The checks also revealed that there has been a noticeable pullback in performance marketing spends from quick commerce platforms.
It added that the valuation for quick commerce businesses is compelling for investors with an investment horizon of more than a year.
Of the 17 analysts that have coverage on Swiggy, 12 have a “buy” rating, two have a “hold” rating and three have a “sell” rating. Meanwhile, of the 30 analysts that have coverage on Zomato, 25 have a “buy” rating, one has a “hold” rating and four have a “sell” rating.
Quick Commerce shares are also resilient at the lows, according to Raamdeo Agrawal of Motilal Oswal Financial Services, who made these remarks in an exclusive interaction with CNBC-TV18 on Monday. He expects this space to generate more value as time goes by.
Swiggy shares gained 6.86% in trade on Tuesday, March 4, to hit an intraday high of ₹348.7 apiece, while Zomato shares gained 3.38% to hit an intraday high of ₹229.66 apiece.
At 12.10 pm, Swiggy shares were trading 4.38% higher at ₹340.6 apiece, while Zomato shares were up 3.22% at ₹229.3 apiece. While shares of Swiggy are still below their IPO price of ₹390, those of Zomato are down over 30% from their peak of ₹304.
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