ICICI Securities has issued 'Buy' ratings for two prominent companies in the food delivery and quick commerce sectors—Swiggy and Zomato. The firm projects significant growth potential for both stocks, with Swiggy's shares anticipated to surge by up to 127% and Zomato's by approximately 40%. ​

Swiggy: A Potential 127% Upside

ICICI Securities has set a target price of ₹740 per share for Swiggy, indicating a potential upside of 127% from its current valuation.

Food Delivery Segment: Valued at ₹99,800 crore.

Quick Commerce Segment: Valued at ₹42,800 crore.​

Cash Reserves: Amounting to ₹9,000 crore.​

The brokerage acknowledges recent concerns over increasing cash burns in the quick commerce sector but believes these issues have been overly factored into the current stock price. ​

Zomato: Approximately 40% Growth Expected

For Zomato, ICICI Securities has maintained a 'Buy' rating with a target price of ₹310 per share, suggesting an approximate 40% increase from its present value. The SoTP valuation for Zomato comprises:​

Food Delivery Segment: Valued at ₹1.6 lakh crore.

Quick Commerce Segment: Valued at ₹96,600 crore.

Cash Reserves: Totaling ₹18,000 crore.

Similar to Swiggy, concerns about cash burns in quick commerce have impacted Zomato's stock price. However, ICICI Securities believes these apprehensions are already reflected in the current valuation, presenting an opportunity for growth. ​

Structural Growth Remains Intact

Despite a slowdown in the third quarter of the fiscal year 2025, ICICI Securities asserts that the structural growth for both Swiggy and Zomato remains robust. The firm anticipates that potential income tax cuts in the upcoming fiscal year 2026 Union Budget could boost middle-class spending, particularly benefiting hyperlocal e-commerce and food delivery services due to their discretionary nature. ​

Investors considering these stocks should weigh the projected growth against existing market conditions and individual financial goals. As always, it's advisable to conduct thorough research or consult with a financial advisor before making investment decisions.