Zomato increases platform fee to Rs 10; Sixth hike over last one year
Zomato increased the fee to Rs 3 in October 2023, followed by Rs 4 in January 2024, Rs 5 in April 2024, Rs 6 in July 2024, and Rs 10 in October 2024
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A day after announcing its successful quarterly results, food delivery platform Zomato on Wednesday increased the platform fee to Rs 10. This is the sixth time Zomato has raised the platform fee over the last year, starting from Rs 2 in August 2023 to Rs 10 at present.
The platform increased the fee to Rs 3 in October 2023, followed by Rs 4 in January 2024, Rs 5 in April 2024, Rs 6 in July 2024, and Rs 10 in October 2024.
According to Karan Taurani, Senior Vice President at Elara Securities, the platform fee and advertisement revenue will be key levers to achieve a guided Adjusted EBITDA margin of 4-5% (food delivery) in fiscal year 2027, along with a stable commission rate from restaurants.
However, Taurani mentioned that the hike is likely to be effective only in top metro cities (~40% of total orders), and the positive impact on adjusted EBITDA could be a mere 4-4.5% (15-20 bps higher take rates).
Zomato's adjusted EBITDA for food delivery increased by Rs 252 crore year-on-year to Rs 341 crore in the second quarter of FY2025.
Taurani added, "The higher platform fee is unlikely to negatively impact order volumes, as it is merely 2-2.5% of the overall AOV."
Yesterday, Zomato announced its quarterly results. The company's net profit climbed to Rs 176 crore between July and September 2024, up from Rs 38 crore in the same period last year.
Revenue from operations surged to Rs 4,799 crore compared to Rs 2,848 crore.
Recently, Zomato said it is considering a fundraising proposal through a Qualified Institutional Placement (QIP).
As of FY24, the cash and investments in Zomato's balance sheet stood at $1.5 billion, while Swiggy's was $735 million. On the other hand, Zepto’s cash balance was $1.5 million in FY2023, according to Elara Securities.
After FY23, Zepto raised $200 million in August 2023, $31.2 million in November, $665 million in June 2024, and $340 million in August 2024, potentially bringing Zepto’s cash balance to $1.23 billion, noted the capital market company.
Swiggy has also increased the fresh issue size to $602 million, up from the $450 million proposed earlier. According to Taurani, the fundraise may increase Swiggy’s cash and investment balance to $1.3 billion (including post-IPO), almost on par with Zomato.
Zomato's share price on Wednesday were up 2.13 percent at Rs 261.65 on the Bombay Stock Exchange (BSE) at 1:07 pm (IST).
