Zomato stock soars over 4.50% after food delivery firm hikes platform fee in Delhi NCR and other cities

Zomato Share Price: Zomato shares soared by over 4.50 per cent on BSE on Monday (April 22, 2024) in the first trading session after the company increased its platform fee in some markets in the country. Along with that, Zomato was also slapped with a GST penalty worth Rs 5.95 crore on Friday.

The stock that opened the week at Rs 193.00 raced to the day's high of Rs 197.80, a 4.55 per cent jump from its Friday's close of Rs 189.20.

The Zomato stock closed trading up by 2.19 per cent, or Rs 4.15, at Rs 193.35 on Monday.

Zomato increases platform fee

Zomato has increased its platform fee from Rs 4 to Rs 5 in some markets of the country.

It has increased the platform fee for Delhi and NCR, Bengaluru, Mumbai, Hyderabad and Lucknow.

In August 2023, the company for the first time started charging Rs 2 as the platform fee.

Its rival, Swiggy, already charges a platform fee of Rs 5 per order.

Zomato platform fee hike timeline

Month                 Platform Fees (Rs)
August 2023                       2
October 2023                     3
January 2024                      4
April 2024                            5

Impact of increased platform fees on Zomato's financials

It is estimated that Zomato's order volume will be 85-90 crores in FY25.

FY25 EBITDA is estimated to grow by 5 per cent due to the increase in the platform fee.

EBITDA is expected to increase from Rs 85-90 crore.

Increasing platform fees in a phased manner will not lead to a decline in the order volume.

The platform fee is expected to reach at Rs 8-10 per order in metro cities in the medium term.

On December 31, Zomato increased the platform fee to Rs 9 in some cities.

What if Blinkit also starts charging platform fee, as per Morgan Stanley

Zepto starts charging Rs 2 as the platform fee in some areas.

Blinkit's expectation of EBITDA breakeven will increase after imposing the platform fee.

If Rs 2 platform fee is charged- 

Adjusted EBITDA              FY25E Growth
Blinkit                                        +34%
Zomato                                      +3%

Zomato slapped with GST penalty

The company said on Friday (April 19, 20204) that it had received an order for the period July 2017 to March 2021 passed by Additional Commissioner, Central Goods and Services Tax, Gurugram, raising demand of GST of Rs 5,90,94,889 with applicable interest (not quantified) and penalty of Rs 5,90,94,889.