Zomato shares surged today after the online food delivery platform reportedly increased its platform fee by 25 per cent to Rs 5 per order.
Zomato introduced a platform fee—the flat charge that food delivery companies charge customers across orders—of Rs 2 in August last year. It was later hiked to Rs 3 to improve margins and with an aim to become profitable.
Fuelled by record food orders on New Year’s Eve, the food delivery platform increased its mandatory platform fee to Rs 4 from Rs 3 per order across key markets in January. Following the fresh hike, Zomato shares jumped 4.54 per cent to hit a fresh high of Rs 197.80 on the Bombay Stock Exchange (BSE).
Motilal Oswal Securities has a ‘Buy’ rating on the stock with a target of Rs 220, while Kotak Institutional Equities finds the stock worth Rs 210.
UBS, in its report on April 12, stated, “We believe Zomato’s quick commerce growth and margin potential are underappreciated and not fully priced in. Our detailed TAM and unit economics framework suggests FY24-29e GMV CAGR of c45%, $10.2 billion by FY29e, 20 per cent above consensus. More importantly, FY29e Ebitda margins should touch 9 per cent, almost 2x consensus. This drives our new street-high PT of Rs250. Maintain Buy.”
As of 12:20 pm, Zomato shares were trading 1.64% higher at Rs 192.30.
