Swiggy shares jump 5% a day after Q2 results sparked a 17% crash. Why brokerages remain bullish despite ta

The company’s overall net loss narrowed to Rs 922 crore, from Rs 1,092 crore in the same quarter of last year. However, the rising losses in the quick commerce segment, Instamart, spooked investors, offsetting food delivery’s strong gains. It added 69 net dark stores during the quarter to cater to the highly competitive market.Live EventsSwiggy's core food delivery business continued to improve profitability, with GOV increasing 17.7% year-on-year to Rs 10,054 crore.

The segment reported its highest quarterly adjusted EBITDA of Rs 341 crore, up 42% from Rs 240 crore a year earlier.What brokerages expect for Swiggy?Jefferies maintained its stance that Swiggy is a high-risk, high-reward stock, while reducing its target price to Rs 330 apiece. It noted that the current share price does not fully reflect the value of the food delivery business and existing cash, while the company's performance remains lacklustre compared with market leader Eternal.

The brokerage said reducing quick commerce losses is essential for value discovery, as this remains a key investor concern.Nomura also maintained its ‘Buy’ rating while slashing the target price to Rs 300, continuing to view food delivery as a cash-generating business for Swiggy. Bernstein reiterated its ‘Outperform’ rating, while noting that the contrast with Blinkit's performance is testing investor patience over Instamart's turnaround and path to profitability.

The stock has overall fallen around 57% in one year.The company has a market capitalisation of a little over Rs 50,320 crore.Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication.

The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.(You can now subscribe to our ETMarkets WhatsApp channel)