Bajaj Broking has recommended a “Subscribe for Long Term” rating for food delivery giant Swiggy Limited’s initial public offering (IPO), citing persistent losses despite revenue growth. The IPO is priced between ₹371 and ₹390 per share.
The company reported revenue of ₹11,634 crore in FY24, while losses decreased to ₹2,350 crore.
Bajaj Broking’s analysis indicates aggressive valuation metrics, including a price-to-book ratio of 11.60 based on June 2024 figures, despite negative earnings per share and return on net worth.
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The funds raised will be directed toward technology enhancement, brand building, and expanding quick commerce operations through new dark stores. However, the brokerage firm highlights concerns about the company’s path to profitability, given operational costs and intense competition from rivals like Zomato and Zepto.
While acknowledging Swiggy’s growth potential in hyperlocal commerce, Bajaj Broking cautions investors about ongoing financial risks. The brokerage’s recommendation suggests the IPO is better suited for investors willing to maintain long-term positions rather than those seeking short-term gains.