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Motilal Oswal initiates coverage on Swiggy with ‘Neutral’ rating, sees 15% upside potential

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Ashutosh Dubey
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Motilal Oswal initiates coverage on Swiggy with 'Neutral' rating, sees 15% upside potential

Brokerage company Motilal Oswal has initiated coverage on Swiggy with a ‘neutral’ rating, predicting a 15% upside potential from its current stock price. This comes days after the food tech giant’s $1.3 billion public offering.

Swiggy loses market leader position to Zomato, Zepto – Motilal Oswal

According to INC42, analysts at Motilal Oswal noted that Swiggy has lost its market leader position to Zomato and Zepto, but its unified app approach will give it an edge in the competitive food delivery and quick commerce segments.

Continue Exploring: Zepto expands Cafe service to major cities after achieving INR160 Cr revenue run rate

“Swiggy stands out as India’s only unified app that seamlessly supports urban users’ food-related needs, from ordering in and dining out to cooking at home—all through a single platform,” the brokerage said.

However, Swiggy’s integrated app offering maximises cross-utilization of its services and promotes user stickiness, unlike Zomato’s multi-app approach. The brokerage expects Swiggy’s food delivery business to achieve stable unit economics, with margins improving from 6.4% to 9% by FY28.

Swiggy to grow 22.6% in GOV 

Further, Motilal Oswal expects Swiggy’s food delivery business will grow 22.6%, 27.9%, and 19.4% in gross order value (GOV) over FY25, FY26, and FY27, respectively. The quick commerce segment’s GOV is expected to grow 64.5%, 67.1%, and 56% during the same periods.

Continue Exploring: Biryani By Kilo secures $2 Mn from Pulsar Capital at $100 Mn Valuation

The brokerage also noted that Swiggy’s unified platform should allow it to extract higher average order volumes (AOV) for its Instamart business and monetize the platform better for ad-sales and other value-added services.

“Swiggy’s unified platform should allow it to mine its customers better and extract higher AOVs for its Instamart business. Further, it needs to monetise this platform better for ad-sales and other value-added services for FMCG brands,” the brokerage further stated.

This report follows JM Financial‘s initiation of coverage on Swiggy with a ‘buy’ rating and a price target of INR 470, citing its rapid growth and potential for sustainable margins. Swiggy made its stock market debut on November 13, listing at an 8% premium on the NSE.

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Zomato expects 30% annual growth in core delivery business over next five years

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Ashutosh Dubey
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Zomato expects 30% annual growth in core delivery business over next five years

Food delivery platform Zomato foresees its core delivery business to grow at an annual rate of 30% over the next five years, driven by the sector’s nascent stage in India.

Food delivery sector is in nascent stages – CEO, Zomato

“The food delivery sector is still in its nascent stages in the country and… more competition will only foster innovation and growth which will benefit the sector overall,” said Rakesh Ranjan, Zomato’s food delivery CEO, as per INC42.

Reportedly, Zomato currently dominates the food delivery space with a 58% market share, surpassing rival Swiggy‘s 34%. The company’s food delivery business, accounting for 58% of revenue, recorded a gross order value (GOV) of INR 322.24 billion last fiscal year, maintaining a 30% average annual growth over four years. Ranjan aims to sustain this growth pace for the next four to five years.

Meanwhile, the food delivery platform has expanded its restaurant network to 247,000 average monthly active partners, marking an 18% year-on-year increase. New features include scheduled delivery, discounted cancelled orders, and large order fleets. However, “phenomenally high” attrition among delivery drivers remains a challenge, prompting the company to offer benefits and flexibility to onboard gig workers.

Zomato’s revenue surges to INR 2,848 Cr

Further, Zomato’s recent performance shows strong growth, with operating revenue increasing 68.5% year-on-year to INR 2,848 crore in Q2. Profit after tax (PAT) surged 389% from INR 36 crore, while food delivery GOV rose 5% quarter-on-quarter to INR 9,690 crore. Quick commerce arm Blinkit’s GOV increased 25% quarter-on-quarter to INR 6,132 crore.

The company plans to launch an INR 8,500 crore qualified institutional placement (QIP) in December, with Morgan Stanley selected as the investment bank. The fundraise aims to enhance Zomato’s cash balance, which stood at INR 1,726 crore at the end of September 2024. Morgan Stanley maintains an “overweight” rating on Zomato’s stock and has raised its price target to INR 355 from INR 278, citing strong market leadership and growth potential in quick commerce.

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Proost Beer raises INR 30 Cr in Series A Funding to boost supply chain

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Ashutosh Dubey
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Proost Beer raises INR 30 Cr in Series A Funding to boost supply chain

Homegrown beer brand Proost Beer has secured INR 30 crore (approximately $3.5 million) in funding as part of its ongoing Series A round, co-led by Chimes Group and Porus Laboratories CEO Srinavasan Namala.

Hyderabad Angels, The Chennai Angels, HNIs participate

Hyderabad Angels, The Chennai Angels, and several high net worth individuals (HNIs) also participated in the round.

Founded in 2017 by Vijay P Sharma and Tarun Bhargava, Proost Beer manufactures and sells a range of beers, all made in India. The Delhi NCR-based brand aims to capture 5% of the Indian beer market by 2030 through innovation, customer-focused product development, and market expansion.

However, Proost Beer competes with established players like Diageo, United Breweries, and Pernod Ricard India, as well as startups like Bira91 and White Owl Brewery. “With these funds, we will focus on expanding and strengthening our production capacity, entering new markets, and deepening our presence in existing ones through brand building,” said Tarun Bhargava.

India’s beer market to grow at 7.1% CAGR

Notably, the Indian beer market has seen significant funding activity recently. In August, LB Brewers raised $1.5 million, while Bira 91 secured $25 million in June. According to a report, India’s beer market is expected to grow at a CAGR of 7.1% from 2024 to 2032, reaching ₹781.2 billion by 2032.

The funding will enable Proost Beer to enhance its supply chain, product offerings, and brand visibility. Bhargava added, “We will focus on expanding into strengthening our production capacity, expanding into a few new markets while also ensuring that we go deeper into our existing ones on the back of brand building.”

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10-minute food delivery startup Swish raises $2 Mn in seed funding

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Ashutosh Dubey
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10-minute food delivery startup Swish raises $2 Mn in seed funding

Just three months after its incorporation, Swish, a 10-minute food delivery startup, has secured $2 million in seed funding led by venture capital firm Accel. 

Angle investors Karthik G., Abhiraj B.l, Varun K. participate 

Angel investors Karthik Gurumurthy, ex-Swiggy Instamart head, and Urban Company founders Abhiraj Bhal and Varun Khaitan also participated in the round.

Continue Exploring: D2C apparel brand The Bear House launches first physical outlet to expand into retail

Reportedly, Swish plans to utilise the funding to expand its operations and scale its presence across Bengaluru. Launched in August, the startup currently operates in HSR Layout and Bellandur, with plans to open 150 centres across major areas in Bengaluru and eventually expand to other Tier-1 cities.

Founded by Aniket Shah, Saran S, and Ujjwal Sukheja, Swish delivers fast food through its app, available on Google Play Store and Apple Store, which has seen over 10,000 downloads since launch. The startup makes deliveries via its cloud kitchen, Pod, and reportedly receives 150-200 orders daily with an average order value of INR 250-300.

Continue Exploring: Coca-Cola Christmas ad controversy: netizens react to ‘Real Magic AI’ creation

Swish to bring ultra-fast experience to food delivery – Accel partner

“Customer expectations around delivery times have shifted with the rise of quick commerce. Swish is tackling this challenge with a new approach, rethinking the supply chain to bring the same ultra-fast experience to food delivery through their delight centres,” said Accel partner Abhinav Chaturvedi.

This development comes as competition in the 10-minute food delivery segment intensifies. Swiggy and Zepto are expanding their presence in this space, with Zepto announcing plans to take its Zepto Cafe service live in 120 cities. Swiggy launched its 10-minute food delivery service Bolt in six cities last month. Zomato is also reportedly reentering the space via its quick commerce arm Blinkit.

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Biryani By Kilo secures $2 Mn from Pulsar Capital at $100 Mn Valuation

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Ashutosh Dubey
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Biryani By Kilo secures $2 Mn from Pulsar Capital at $100 Mn Valuation

Cloud kitchen startup Biryani By Kilo has secured approximately $2 million (INR 16.5 crore) in funding from Dubai-based investment firm Pulsar Capital, according to regulatory filings. 

Further, as per Inc42, the funding valuation at around $100 million.

Reportedly, Pulsar Capital, a private equity firm run by former TPG partner Vish Nair, has investments in healthcare provider TruDoc and ecommerce enabler Assidus.

Biiryani By Kilo raises $9 Mn in 2023

This funding comes almost a year after Biryani By Kilo raised $9 million from existing investors Alpha Wave Ventures, Vevek Ventures, DSP HMK Holdings, IvyCap Ventures, Incred Wealth, and Clear Bridge Ventures.

Founded in 2015 by Vishal Jindal and Kaushik Roy, Biryani By Kilo offers biryanis, kebabs, kormas, and desserts through its 100+ outlets across India and delivery services in over 45 cities. The startup has raised a total of $52 million in funding and counts Falcon Edge Capital and IvyCap Ventures among its investors.

Biryani By Kilo’s net loss surges 2.7X

Meanwhile, Biryani By Kilo competes with Rebel Foods’ Behrouz Biryani and Biryani Blues, and Bengaluru-based Potful. In FY22, the startup’s net loss increased 2.7 times to INR 42.6 crore, while sales doubled to INR 132.6 crore.

To be noted, the cloud kitchen market is expected to reach $3 billion by FY31, driven by the growth of foodtech platforms like Zomato and Swiggy. This has led to the emergence of several cloud kitchen startups in India over the past few years.

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Zepto expands Cafe service to major cities after achieving INR160 Cr revenue run rate

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Ashutosh Dubey
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Zepto expands Cafe service to major cities after achieving INR160 Cr revenue run rate

Quick commerce company Zepto has announced the expansion of its cafe service to 120 cities, including Delhi NCR, Bengaluru, Hyderabad, Chennai, and Pune. 

This move follows the company’s achievement of an annualised revenue run rate of INR 160 crore from just 15% of its dark store network.

Continue Exploring: Simba Beer makers launch ZigZag Vodka, eye national presence

Zepto runs Cafe service in Mumbai, offers 148 items

Currently operating only in Mumbai, Zepto Cafe offers 148 items, including beverages and snacks, with a 10-minute delivery promise. The menu features chai, coffee, breakfast options, pastries, and savoury snacks. “We have cracked 10-minute delivery with high-quality food preparation processes. Our team has researched and sourced equipment for cafes, including coffee machines that employ handcrafted brewing techniques,” said Zepto CEO Aadit Palicha.

Founded in 2021, Zepto pioneered 10-minute delivery in India, delivering over 25,000 products across categories through its dark store network. The company launched Cafe in Mumbai in 2022, which boosted average order values as users ordered beverages and snacks with groceries.

Continue Exploring: The Good Glamm Group acquires 100% stake in The Moms Co.

Zepto raises $1 Bn in 2024

Zepto has raised over $1 billion in 2024, including $340 million at a $5 billion valuation in August and $665 million at a $3.6 billion valuation in June. The company plans to raise an additional $300 million from Indian investors.

With a GMV of over $1 billion in FY24, Zepto aims to expand from 350 to 700 stores, with 75% of stores achieving EBITDA positivity by May 2024. According to CLSA, the gross order value of major quick commerce players may reach $10 billion by FY26.

Looking ahead, the quick commerce platform plans to go public in the next couple of years and is in the process of redomiciling to India.

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Simba Beer makers launch ZigZag Vodka, eye national presence

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Ashutosh Dubey
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Simba Beer makers launch ZigZag Vodka, eye national presence

The makers of Simba beer, Prabhtej Singh Bhatia and Ishwaraj Singh Bhatia, have ventured into the liquor space with the launch of ZigZag vodka.

Co-founder Ishwaraj Bhatia announces launch in 3 states

According to ET Retail, Ishwaraj Bhatia, co-founder of ZigZag, revealed that the brand has been launched in three states – Chattisgarh, Goa, and Delhi, with plans to expand to Karnataka and Assam in December and Maharashtra and Haryana next fiscal year.

Continue Exploring: Food inflation to moderate in urban areas, double-digit growth expected – MD, Marico

To begin with, the company has invested INR 45 lakh in setting up a carbonation plant in its Chattisgarh facility, which can produce 1 lakh cases per month. ZigZag vodka is available in four options – original, lime, orange, and green apple – in three sizes: 750ml, 375ml, and 180ml.

“It is the right time for us to enter the market as the vodka market in India is dominated by a few brands and consumers are looking for more options. In addition, India is a flavour-driven market, and next quarter, we will be launching ZigZag in two new flavours,” Bhatia said. “Apart from this, the newer brands that are coming up in the market have a regional focus and we plan to make it a national brand.”

Continue Exploring: D2C apparel brand The Bear House launches first physical outlet to expand into retail

Simba Beer aims expansion across 17 states in 3 years

The company aims to have a presence across 17 states within three years. “In the next 3 years, we plan to have a presence with ZigZag across all 17 states we have a presence in. At present, we have no plans to launch it in the international markets,” Bhatia stated.

Simba, which produces 4.5 lakh cases monthly, clocks an EBITDA profitability of 25-30%. “Simba has been growing at a CAGR of 17 per cent year-on-year, and over the next five years, we eye a similar growth for ZigZag,” Bhatia asserted. “With the launch of Zigzag, we are expecting a definitive jump in revenue as liquors have better margins as compared to beer.”

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The Good Glamm Group acquires 100% stake in The Moms Co.

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Ashutosh Dubey
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The Good Glamm Group acquires 100% stake in The Moms Co.

The Good Glamm Group, a leading content-to-commerce unicorn, has fully acquired the direct-to-consumer (D2C) mom and baby care brand, The Moms Co.

The Good Glamm also acquires Sirona

This move follows the company’s recent transactions, including the completion of its Sirona deal and increased stake in Organic Harvest and Winkl.

Continue Exploring: Barista Coffee expands into home-brewing market with coffee capsules and machines

Earlier, The Good Glamm Group initially acquired a majority stake in The Moms Co. in October 2021 to expand its presence in South Asia. In March 2023, the company raised its stake from 75% to 90%, resulting in partial exits for cofounders Malika and Mohit Sadani and complete exits for investors DSG Capital and Saama Capital.

Founded in 2016, The Moms Co. offers baby and pregnancy care products, as well as beauty products. “The Moms Co is highly trusted for its proven efficacy among moms and babies. The brand experienced significant growth over the last two years, and we aim to maintain this momentum by leveraging our content-to-commerce growth engine,” said Darpan Sanghvi, founder of The Good Glamm Group.

Continue Exploring: Meesho cracks down on  2.2 Cr fraudulent transactions, files 12 cases in 12 months

The Good Glamm Group surges stake into Organic Harvest, Winkl

Further, The Good Glamm Group has also increased its stake in Organic Harvest and Winkl. The company’s portfolio includes D2C brands Sirona, The Moms Co., Organic Harvest, St. Botanica, and Wyn Beauty, among others.

Despite The Moms Co.’s net loss increasing 60% to INR 64.38 crore in FY23 from INR 40.14 crore in FY22, its operating revenue grew 38% to INR 71.22 crore during the same period. The company’s financial performance reflects its growth potential, and The Good Glamm Group’s acquisition is expected to further boost its expansion.

With this acquisition, The Good Glamm Group reinforces its position in the D2C market, leveraging The Moms Co. ‘s trusted brand reputation and its own content-to-commerce expertise.

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Barista Coffee expands into home-brewing market with coffee capsules and machines

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Ashutosh Dubey
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Barista Coffee expands into home-brewing market with coffee capsules and machines

Barista Coffee, a popular Indian coffee chain, has launched coffee capsules and machines for the home-brewing market. The new products aim to meet the growing demand for convenient, high-quality coffee at home.

Will set new standards in the home-brewing market – CEO, Barista Coffee

The coffee capsules, priced at INR 500 per pack, come in two blends: Classic and Dark Roast. The coffee machine is priced at INR 15,999, with an introductory offer of INR 12,000.

Continue Exploring: Hospitality investment firm Fine Acers aims to manage INR 5,000 Cr in assets by 2027

According to Rajat Agrawal, CEO of Barista Coffee, “Barista is all set to bring this new line of coffee capsules and coffee machines to the customers, making it easier than ever to enjoy the Barista experience at home. Our goal was to create a convenient yet authentic coffee experience that embodies the quality and craftsmanship Barista is known for. We believe these offerings will be warmly received by our coffee-loving community and will set new standards in the home-brewing market.”

Barista Coffee available at e-commerce platforms

The product range promises a rich and aromatic coffee experience, with minimal effort required. The capsules are designed to deliver Barista’s signature taste. The coffee machine and capsules are available at selected Barista cafes in cities like Delhi NCR, Chandigarh, Mumbai, Kolkata, and Bengaluru, as well as through e-commerce platforms.

Continue Exploring: OYO founder Ritesh Agarwal increases stake with INR 550 Cr investment

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Meesho cracks down on  2.2 Cr fraudulent transactions, files 12 cases in 12 months

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Ashutosh Dubey
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Meesho cracks down on  2.2 Cr fraudulent transactions, files 12 cases in 12 months

E-commerce platform Meesho has taken stringent measures to combat fraudulent activities on its platform, according to its annual “Trust Assurance Report” released Monday, November 18.

The SoftBank-backed company reported that it has prevented over 2.2 crore suspicious transactions and filed 12 cases in the last 12 months.

Meesho’s advance tech model prevent 77 lakh scam attempts

Notably, the e-commerce company’s advanced analytical models and data science frameworks have helped prevent 13 lakh bot orders and blocked 77 lakh scam attempts. “In the last 12 months, Meesho has prevented over 2.2 crore fraudulent transactions. Additionally, Meesho undertook extensive steps to remove bad actors from the platform,” the report stated.

Continue Exploring: Food inflation to moderate in urban areas, double-digit growth expected – MD, Marico

Following which, the company launched proactive investigations against account takeover fraud, resulting in nine cases filed against over 40 suspects in Kolkata and Ranchi. This collaboration with authorities led to an impressive 98% success rate in addressing account takeover fraud.

Meesho tackles lottery fraud by 75%

Reportedly, Meesho also tackled lottery frauds, where scammers target users with malicious links promising rewards or cashbacks. The company lodged three FIRs and conducted comprehensive investigations in Kolkata, Bengaluru, and Ranchi. “Lottery fraud has emerged as an industry-wide challenge where fraudsters impersonate reputable brands to deceive unsuspecting individuals,” the report noted. Meesho claims to have reduced lottery fraud incidents by 75% since October 2023.

Continue Exploring: OYO founder Ritesh Agarwal increases stake with INR 550 Cr investment

Furthermore, Meesho partnered with threat intelligence platforms to take down over 18,000 fraudulent social media accounts and approximately 130 fake websites and apps misusing its brand. The company moved the Delhi High Court for a permanent injunction against these fraudsters. “The court recognised Meesho as a ‘well-known mark’ and ordered domain registrars to deactivate these sites. It also directed law enforcement to investigate, freeze related bank accounts, and take appropriate punitive action,” the report said.

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