Morgan Stanley- the global brokerage is bullish on the ever evolving food delivery as well quick commerce space. As we write, both the food delivery majors are trading with strength. Swiggy at the time of writing this copy at around 9:48 am traded with gains of 1.92 per cent or Rs 6.4 at Rs 339.7. Nonetheless, at the day’s high, the stock zoomed to Rs 341.7 per share on the NSE.
In a similar stride, Eternal was up 0.81 per cent or Rs 1.95 at Rs 243.15, while the stock’s day high and low levels are Rs 245.83 and Rs 240.55 apiece, respectively on the NSE.
Morgan Stanley on Swiggy
The global brokerage has intiated an overweight call on the stock with the target at Rs 405, implying 22 per cent potential upside. The brokerage highlighted the company’s improving execution in food delivery space.
The brokerage also said that the company is expanding its quick commerce total addressable market (TAM) as well as making aggressive investments which is being discounted by the market. Nevertheless, it is not transitioning in the topline numbers.
Morgan Stanley mentioned that in a duapoly market, with the improved execution, Swiggy is close on the heels o closing gap with food delivery on the margin front in the food delivery space.
Considering all the expansion and improved execution, the brokerage has upped the company’s QC TAM estimates higher to $57 billion by 2030.
Further, it quick commerce margin breakeven to happen in six quarter, while the adjusted EBITDA breakeven is expected by H2FY29.
The brokerage values food delivery On FY28 Adj EBITDA & QC Biz On FY31 Adj EBITDA .