Swiggy gains 5% as Blinkit Q1 results lift sector sentiment
What's the story
Swiggy's stock price saw a surge of 4.9% to ₹412 today, thanks to growing investor confidence in the online food delivery and quick commerce sectors. The rise comes after Eternal (formerly Zomato), a peer company, reported strong Q1 results with its quick commerce segment Blinkit leading the way. Eternal's shares gained an impressive 15%, hitting an all-time high of ₹311.6.
Market response
Jefferies upgrades Eternal to a 'Buy'
Eternal's stellar quarter showcased Blinkit's rapid growth, which has now overtaken Zomato in terms of Net Order Value (NOV). In Q1, Blinkit generated ₹2,400 crore in revenue, surpassing Zomato's food delivery earnings of ₹2,261 crore. The performance prompted brokerages to upgrade their outlooks for the company. Jefferies upgraded Eternal to a 'Buy' with a target price of ₹400, citing its underestimated competitive position and significant growth potential.
Growth prospects
Swiggy shows solid bullish signals
"Eternal represents a key play in India's expanding food services market and digital commerce adoption," Jefferies said. Despite having only around 23 million monthly transacting users, Eternal has plenty of room to grow. This has fueled investor enthusiasm, which is also reflected in Swiggy's performance today.