Zomato shares rise 3% on platform fee hike

Shares of food delivery platform Zomato rose 3% to Rs 128.3 in Tuesday’s trade on BSE after the firm increased the platform fee it charges users for food delivery to Rs 4 per order in its key markets from Rs 3. The 33% increase is effective from January 1.

According to global brokerage firm CLSA, the 33% platform fee hike would partially offset the impact of GST on delivery charges.

Earlier in December 2023, Zomato received a Rs 402-crore show-cause notice from the goods and services tax (GST) authorities over unpaid dues.

The listed firm started levying a flat platform fee in August 2023. Initially, it was Rs 2 per order and was subsequently increased to Rs 3 in most of its major markets.

“These are business calls which we take basis various factors from time to time,” a Zomato spokesperson told ET on the platform fee hike, but did not provide further details.

Zomato’s closest rival, Bengaluru-based Swiggy, too, last year began charging a Rs 2 fee, which was later hiked to Rs 3.

Zomato levies the platform fee in addition to a delivery charge, which is waived for customers of its loyalty programme, Zomato Gold, who make an upfront payment and get benefits such as discounts and free delivery. The platform fee, however, is applicable to Zomato Gold members as well.At 12.05 pm, the scrip was trading 2.2% higher at Rs 127.2 on BSE. Zomato’s stocks also delivered multibagger returns in the past one year, as it has rallied over 110%. In the last three months, the stock surged over 25%.

Zomato-owned quick-commerce platform Blinkit levies a handling charge of Rs 2 on every order.

In its July-September quarterly results, Zomato’s management had attributed the improvement in its take rate — or the percentage of what the company makes on every order — for food delivery to the introduction of the platform fee.

According to a research note by Jefferies in November, Zomato’s take rate in the September quarter of fiscal 2024 was 24.1%, improving 28 basis points (0.28 percentage point) from a year earlier and 32 basis points from the previous three-month period.

The report estimated Zomato to have delivered around 190 million orders during the quarter, 14% higher than the same period last year.

The three-month period ended September 30 saw Zomato post its second consecutive quarterly net profit. It reported a profit after tax of Rs 36 crore during the quarter. In the April-June quarter, it had reported a net profit of Rs 2 crore.

Technically, the stock’s day RSI (14) is at 54.1. The RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed. MACD is at 2.6, which is above its Center Line, but below signal line. Shares of Zomato are also trading higher than the 50-day, and 200-day moving averages.

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