Swiggy shares fall another 2% to hit new low. Will it hit Macquarie target price of Rs 325?
Swiggy shares continued to fall for the fourth consecutive day on Friday as investors continued to sell the stock after the company's Q3 EBITDA losses were higher than Street estimates. During the day, Swiggy stock fell up to 2.5% to Rs 379.20 on BSE. Macquarie is the biggest bear on the stock right now with the target price going as low as Rs 325.
The stock had fallen below its IPO issue price of Rs 390 in the previous session before ending the day with 7% downside. Despite revenue jump of 31% year-on-year (YoY), Swiggy's Q3 loss widened to Rs 799 crore.
«Given the heightened competitive intensity and continued investment in dark stores, we expect the losses to further widen in Q4. While food delivery KPIs (on growth, MTUs
increase etc) were better than Zomato, the quick com KPIs lagged Zomato, particularly in terms of order growth & contribution margin (CM),» BofA Securities said.
The brokerage has a target price of Rs 510 saying that despite earnings miss, it maintains buy as competition is expected to be intense for 3-6 months, but it remains optimistic on the medium-term potential from growth of quick commerce.
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