look news india
Zomato Platform Fees: Food delivery platform Zomato has increased the platform fee by 25 percent to Rs 5 per order. Due to this the user's order bill is going to increase. Additionally, the company has also suspended its inter-city food delivery service called Intercity Legend. In August 2023, Zomato started charging a platform fee of Rs 2 to increase its margins and make it profitable. After this the company increased the fee to Rs 3 and on January 1, it has been increased to Rs 4. On December 31, the platform fee was increased to Rs 9 but this increase was temporary.
Analysts had said at the time that it was expected that the growth in platforms would mitigate the impact of GST on delivery charges. The increase in platform fees is effective only in select cities. Zomato fulfills around 85-90 crore orders on an annual basis. Every Re 1 increase in convenience fee across all geographies could have a positive impact of Rs 85-90 crore or 5 per cent on Ebitda.
Meanwhile, Zomato shut down its Intercity Legend services if orders from top restaurants in major cities were being delivered to customers in other cities. On clicking, Legends tab appears on Zomato app. Enhancement is ongoing.
Zomato shares increased 249 percent in one year
On April 19, Zomato shares closed at Rs 189.20 on BSE. It strengthened on Monday, April 22 and gained an additional 3 percent. The share price has increased by more than 249 percent in the last one year. According to BSE data, public shareholders' stake in the company is 98.42 percent. Zomato's rival company Swiggy will also soon be one of them.
JM Financial Institutional Securities Ltd has raised the target price for Zomato shares from Rs 200 to Rs 260 per share. This is 37.4 percent more than the closing price of April 19. JM Financial Institutional Securities' confidence in Zomato is boosted by the continued growth in its instant commerce arm Blinkit.