Target: ₹415
CMP: ₹226.95
Eternal (Zomato) has raised its platform fee by about 20 per cent to about ₹15/order, in line with its peer, Swiggy.
Hence, Zomato’s increased platform fee should not pose concern over order flows.
We estimate each ₹1 hike drives about 26-bp take-rate expansion and about ₹120-crore incremental adj EBITDA (about 5 per cent of base).
In our base case (50 per cent market implementation at ₹15), this adds about 40 bps to the take rate and ₹180 crore (about 7.5 per cent) to FY27E adj EBITDA.
Platform fees have increased 7.5x since their introduction in August 2023 (₹2 initially); since then, Zomato has hiked them in almost every quarter.
At 3.1 per cent of food delivery (FD) average order value of ₹475, the fee remains too low to trigger demand elasticity, supported by monthly transacting users growth accelerating to about 22 per cent in Q3FY26.
The move supports the management’s 5-6 per cent adj EBITDA/GOV target; we expect 6 per cent by FY28E.
Company data show a gradual increase in platform fees has not affected the gross order value (GOV) growth rate, although the overall food industry slowdown dragged GOV growth during Q3FY25-Q2FY26; FD GOV growth rebounded to 20 per cent+ in Q3FY26.
The fee hike largely factored in our base case Adj. EBITDA margin estimates for FY27E; thus, we keep our estimates unchanged.
We retain Buy with a TP of ₹415, as we value food delivery on 55x EV/EBITDA, Blinkit on 5x EV/gross profit and Going out / Hyper pure on 3x EV/Sales.