Zomato makes a new high after 20% fee hike
Zomato's shares hit a record high after a 20% platform fee increase in select areas, potentially boosting operating profit. Founder Deepinder Goyal's stake in the company is now valued at ₹8,464 crore. Analysts project a 6-7% EBITDA impact with the fee hike. Stock has surged over 84% in 2024.
of advanced as much as 4.3% to a new lifetime high on Monday after the food delivery company hiked its by 20% in select locations. This move could boost by 6-7% if implemented across all cities, according to .The stock ended 3.1% higher to a record closing of ₹229.25, after making a high of ₹232 on the NSE Monday. The record close in catapulted founder and CEO Deepinder Goyal into the billionaires' club. His 4.2% stake in the company is new worth ₹8,464 crore.
The company has hiked its platform fees, levied as a charge on food delivery orders, to ₹6, from ₹5 in New Delhi and Bengaluru.
Elara Capital maintained its 'buy' rating, and target price of ₹280, implying an upside of 22% from Monday's closing levels.
"In terms of , a ₹1 increase if implemented across all cities they're catering to has a positive impact of 6-7% on the absolute ," said Karan Taurani, analyst at Elara Capital.
ETMarkets.com"But this is being implemented in a phased manner, and we can see 1-2% EBITDA upgrades basis this move."
Taurani said there is scope for the platform fee to increase to ₹8-10 per order over the medium term in select metro markets in a phased manner going ahead
Shares of Zomato have returned 84.14% in 2024 so far.
Technical charts are pointing to further upsides in the near term.
"Post the last quarterly results, the stock did see some dip, but buying interest is seen in this stock on declines. Prices trading at record highs with good volumes is a positive sign," said Ruchit Jain, lead research analyst at 5Paisa.com. Shares of Zomato were trading at ₹77 levels a year ago, close to its IPO price of ₹76 per share. The stock has advanced over 186% since then.
Source: Stocks-Markets-Economic Times
