The shares of foodtech giant Zomato touched a 52-week high, INR 232, in early trading hours of Monday
The platform hiked the platform fee to INR 6 per order in its key markets, including Delhi and Bengaluru
Zomato already hiked its platform fee twice this year
The shares of foodtech giant Zomato
touched a 52-week high, INR 232, in early trading hours of Monday (July 15) after the platform hiked the platform fee to INR 6 per order in its key markets, including Delhi and Bengaluru.
At 11:32 AM, Zomato shares were trading at INR 227.75, 2.38% higher as compared to its previous close at INR 222.45.
Zomato and its rival Swiggy have been experimenting with platform fees to boost their overall revenues and profits.
The platform fee was first introduced by Zomato in its portal with INR 2 per order initially. This was followed by Swiggy, called ‘collection fee’.
Zomato already hiked its platform fee twice this year. It first increased the charges to INR 4 per order across key markets on New Year. Then, it hiked the same by 25% to INR 5 per order across its key markets in April.
Zomato stock is continuing a bull run lately. The stock has jumped nearly 170% in the last one year.
Last week, JM Financial cut Zomato’s price target to INR 230 from INR 250 for its ESOP policy.
Giving its reasoning, the brokerage said that ESOP grants should be linked to measurable performance-based outcomes, which is not the case with Zomato’s newly laid-out policy.
“There is a risk of the new ESOP policy being considered unfair by some shareholders as they would be the ones taking a meaningful hit on their earnings in the medium term”, said JM Financial analysts.
Recently, the foodtech major announced the allotment of more than 4.07 Cr stock options to its employees. Zomato said it has allotted 123 equity shares under the Foodie Bay Employee Stock Option Plan 2014 (ESOP 2014) and 4,07,39,330 equity shares under the Zomato Employee Stock Option Plan 2021 (ESOP 2021).
The company posted a 26% quarter-on-quarter jump in its consolidated net profit to INR 175 Cr in Q4 FY24 from INR 138 Cr in the preceding quarter.
While Zomato witnessed some degrowth in the GOV of its core food delivery business in Q4 FY24 with its GOV falling 0.6% QoQ to INR 8,439 Cr, the company continues to remain profitable.
