Swiggy Ltd., India’s prominent food and grocery delivery platform, is once again in the spotlight — and this time, for all the right reasons. On Wednesday, Swiggy’s stock saw a sharp 8% jump, touching an intra-day high of ₹361. This bullish move came on the heels of a coverage initiation by global brokerage Morgan Stanley, which rated the stock as ‘Overweight’ and set a target price of ₹405, indicating a potential upside of around 22% from current levels.

This positive outlook has not only caught the eye of institutional investors but also sparked renewed interest among retail participants watching Swiggy’s post-IPO journey.

💼 What Morgan Stanley Sees in Swiggy’s Future

According to the report released by Morgan Stanley, Swiggy is poised for solid business growth between FY25 and FY28, despite increasing competition. Here’s what the brokerage finds compelling:

✅ Food Delivery to Grow at 15.8% Annually

Swiggy’s core food delivery business is expected to clock a compound annual growth rate (CAGR) of 15.8% over the next three years. The company has managed to maintain a stable market share, which analysts say is impressive given the stiff rivalry from competitors like Zomato (now rebranded as Eternal).

⚡ Quick Commerce Growth Could Be a Game-Changer

Swiggy’s quick-commerce arm, Instamart, is where Morgan Stanley sees the most aggressive growth. The report forecasts a 63% annual growth rate in Gross Order Value (GOV) from FY25 to FY28. This projection is backed by significant capital being deployed to expand last-mile delivery infrastructure and increase customer retention.

📊 How the Valuation Looks Attractive

Morgan Stanley believes that the market is currently underestimating Swiggy’s future earnings potential. Despite operating losses, the firm sees long-term value creation, especially as Swiggy narrows its EBITDA gap with competitors.

Currently, Swiggy is about two years behind Zomato in terms of consolidated profitability, and its food delivery market share is about 15% lower. However, the growth runway appears intact, with the company expected to achieve 4.8% profit margins in food delivery by FY28, compared to Zomato’s projected 6%.

For the quick commerce segment, margins are estimated to reach 2.6% by 2031, while Zomato may reach 4.7%. This shows Swiggy’s upward trajectory, even if slightly behind the pace of its rival.

🏦 Mutual Funds Also Show Confidence

Backing Morgan Stanley’s thesis, mutual funds have been increasing their stake in Swiggy. According to Trendlyne data, institutional investors raised their holdings from 4.40% in Q3 FY25 to 5.51% in Q4 FY25. Such accumulation typically signals long-term confidence in a stock’s prospects.

The increasing institutional participation is noteworthy, especially for a recently listed tech company navigating through high growth and high cash burn phases. The belief is clear: investors are betting on Swiggy’s ability to deliver strong returns in the future.

🔍 Key Takeaways for Investors

• Target Price: ₹405 (upside of 22% from current levels)
• Growth Drivers: Food delivery scaling steadily, quick commerce expanding rapidly
• Mutual Fund Activity: Increased stake shows institutional trust
• Valuation Insight: Short-term losses but long-term profitability in sight

Investors tracking new-age tech companies may want to keep Swiggy on their radar. With macroeconomic support, shifting consumer behavior, and operational scale, the stock could offer significant upside potential in the coming quarters.

🚀 Will Swiggy Beat the Street’s Expectations?

Only time will tell if Swiggy can beat expectations and emerge as a dominant force in both food delivery and quick commerce. But if Morgan Stanley’s projection is anything to go by, the stock is set to offer an interesting ride ahead.

For now, ₹400 may not be too far off — and smart money seems to agree.

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