Zomato shares soar to record high after fee hike 

Shares of Zomato soared to a new record high on Monday, advancing as much as 4.3%, following a strategic increase in its platform fee of 20% in select locations. The food delivery giant closed 3.1% higher at ₹229.25 on the NSE, after touching an all-time high of ₹232. This surge in stock price has propelled Zomato founder and CEO Deepinder Goyal into the billionaires’ club, with his 4.2% stake now valued at ₹8,464 crore.  

The platform fee, a charge on food delivery orders, was raised from ₹5 to ₹6 in key markets like New Delhi and Bengaluru. This increment could enhance Zomato’s operating profit by 6-7% if rolled out nationwide, as per brokerage estimates.  

In anticipation of the company’s Q1 earnings report, Elara Securities forecasts a remarkable revenue surge, projecting a total of ₹3,960 crore for the June quarter—a 63.9% year-on-year increase. This growth is attributed to the sustained expansion of Zomato’s food delivery and quick commerce segments. 

Despite facing challenges in May 2024, including heatwaves, a shortage of delivery partners in Tier I markets, and the impact of general elections on order volumes, Zomato experienced a resurgence in June. This positive momentum is expected to persist in the coming months. 

ICICI Securities predicts a 22.9% year-on-year growth in Zomato’s gross order value (GOV) for food delivery in the June quarter. The brokerage also expects the average order value (AOV) for food to remain stable sequentially, with a 2% year-on-year increase.  

Blinkit, Zomato’s quick-commerce division, is projected to report a 26% quarter-on-quarter rise in adjusted revenue, translating to a staggering 153% year-on-year increase. Overall, ICICI Securities estimates a 14% quarter-on-quarter growth in Zomato’s adjusted revenue, which represents a 59% year-on-year jump. Furthermore, the adjusted EBITDA margin is expected to improve to 7.9% of adjusted revenue, up from 5.01% in Q3FY24 and 0.4% in Q1FY24.