Swiggy Has Let Its Leadership Slip Away, Says Motilal Oswal With ‘Neutral’ Rating
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Mumbai: Despite being an innovator and a category inventor across both food delivery and quick commerce, Swiggy has let its leadership slip away, Motilal Oswal Financial Services Ltd (MOFSL) said on Tuesday, as it initiated coverage with a 'Neutral' rating on the stock. In a note, the leading brokerage wrote that tight execution and better leveraging its platform can fix these issues. Key downside risks for Swiggy are “inefficient management or being unable to scale dark stores as planned may impact quick commerce profitability and high user retention and acquisition costs”. Further risks cited by MOFSL are Swiggy’s limited ability to expand margins in food delivery and quick commerce businesses, which could delay valuation re-rating, and intense competition in food delivery, quick commerce, and out-of-home sectors, which challenges its market position.
Swiggy’s, through its innovation DNA, has played a pivotal role in both food delivery and quick commerce...