ICICI SECURITIES ON SWIGGY AND ZOMATO

Swiggy-Reiterate BUY, TP 740

Zomato-Reiterate Buy, TP 310

Food delivery being ignored by investors

Concerns have been over-baked into the stock prices for both Swiggy and Zomato.

Concerns were regarding increasing cash burns in Quick commerce (QC) due to higher discounting by Zepto

Swiggy (consolidated) is now trading at an ~30% discount to par value for the food delivery business-Implying negative value for the optionality of success in QC.

Zomato on the other hand is trading at a value that ascribes nothing to QC.

Anomaly is unlikely to sustain long, especially given a robust outlook for discretionary consumption from May’25