Swiggy Shares Jump Nearly 5% As Jefferies Sees 60% Upside

Swiggy shares surged nearly 5% to an intraday high of ₹285.35 on the BSE on Thursday after brokerage firm Jefferies initiated coverage with a Buy rating and a target price of ₹435 per share, implying roughly 60% upside from the stock's last closing price, per Inc42. The stock later pared some gains, trading 3.4% higher at ₹280.30 around 2:55 PM IST, with a market capitalisation of ₹77,385.3 Cr (approximately $8.1 Bn).

The catalyst for Jefferies' positive turn was shareholder approval of a 49.5% cap on aggregate foreign ownership, a move that brings Swiggy a step closer to Indian-owned and controlled company (IOCC) status under the Foreign Exchange Management Act (FEMA), according to Inc42. More than 99.9% of shareholders voted in favour of the cap and an amendment to the company's Articles of Association at Swiggy's annual general meeting on Tuesday. A prior attempt to pass the resolution in May fell short, receiving roughly 72% of votes against the 75% threshold required for a special resolution.

Swiggy is an Indian food delivery and quick commerce platform. The IOCC status is significant because it would allow the company to convert Instamart — its quick commerce arm — from a marketplace model, where third-party sellers stock and sell products, to a first-party, inventory-led model in which Swiggy buys goods directly from brands. Jefferies estimates this transition could deliver around 80 basis points of margin upside for the quick commerce business. "The move supports management's plan for a 1P (inventory-led) model at Instamart, which could drive a 80 bps margin upside. While cap may help mitigate potential regulatory risks despite current quick commerce models being compliant, passive outflows are likely once the new foreign ownership framework is implemented, and it could take a few weeks for this to unfold," the brokerage said, as quoted by Inc42.

Jefferies also drew a comparison to Eternal, which similarly obtained IOCC status and subsequently reported improvements in both growth and margins, per Inc42. The brokerage flagged that passive outflows are likely once the new foreign ownership framework is implemented and that the process could take several weeks.

Swiggy's most recent quarterly results offer additional context for the bullish call. For the June quarter, food delivery revenue grew 23% year-on-year to ₹2,208 Cr, with segment profit rising 48% to ₹299 Cr, according to Inc42. Instamart revenue jumped 53% YoY to ₹1,232 Cr, though the unit still recorded losses of ₹651 Cr, down 18% from the prior year. The Supply Chain & Distribution segment grew revenue 41% YoY to ₹3,195 Cr with losses narrowing sharply to ₹8 Cr. Newer businesses including Toing and Crew brought in ₹51 Cr in revenue, but their combined losses widened to ₹131 Cr as Swiggy continued investing in them. Food delivery margins came under pressure during the quarter from temporary factors including LPG supply disruptions, annual wage revisions, and higher delivery-partner spending.

Looking ahead, Swiggy maintained its medium-term guidance of 18–20% gross order value growth and a long-term adjusted EBITDA margin target of 5%, per Inc42. The budget-focused food delivery arm Toing has expanded to 50 cities, with the majority of new users being first-time or dormant customers — a signal, the company says, that the product is expanding its addressable base rather than drawing away from its core service.