Zomato growing faster than Swiggy, says CLSA with target price of Rs 248

Prosus, which holds a 32.7% stake in Swiggy, in its annual results release, disclosed that Swiggy’s overall GMV growth (including food delivery, quick commerce, and dining out businesses) came in at 26% YoY, as compared to Zomato’s 32% YoY growth.

“Swiggy’s overall revenue growth of 24% YoY was also lower than Zomato’s adjusted revenue growth of 55.9% YoY. Swiggy’s trading losses reduced to $158 million during FY24, while Zomato reported a positive Ebitda of $5 million during FY24,” CLSA said.

Swiggy’s core food delivery GOV grew by double digits in FY24 compared to a 22% YoY growth in Zomato’s food delivery GOV. If we assume a 10%/20% GOV growth for Swiggy’s food delivery GOV, it would be 74%/80% of Zomato’s food delivery GOV for FY24, the brokerage said, adding that if we assume the food delivery business grew its GOV by 10%, it translates to a 108% growth in GMV for the non-food delivery business.

Zomato is ahead of Swiggy in the number of delivery partners, dark stores as well as bottomline.CLSA has a target price of Rs 248 per share on the stock. Zomato shares were trading about 2% higher at Rs 203 on the BSE.Analysts at JM Financial said Swiggy’s successful public listing depends on the management’s ability to demonstrate a clear path to adjusted EBITDA break-even at a consolidated level and arrest market share losses in food delivery as well as quick commerce businesses.

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