 "Zomato share price slips 3% as company clarifies hiking platform fees")
Zomato shares declined 2.5 per cent on Thursday (October 24) and registered an intraday low of Rs 257.05 per share on BSE. The stock of the food delivery platform slipped after the company clarified that it had hiked the platform fee to Rs 10 amid the festive season rush.
At around 11:56 AM, Tata Communications shares were up 2.92 per cent at Rs 1,831.05 per share. In comparison, the BSE Sensex was down by 0.04 per cent at 80,046.63 at around the same time. The market capitalisation of the company at around the same time stood at Rs 52,184.93 crore.
In the filing, Zomato said that hiking platform fees was not a rumor, as the source of information mentioned in the article is the Zomato mobile application itself.
It added: We have indeed increased the platform fee yesterday across certain cities. Such changes in our platform fee are a routine business matter and are done from time to time and may vary from city to city.
Zomato increased its platform fee to Rs 10 from Rs 7, just ahead of the upcoming festive season.
The app notification said, “This fee helps us pay our bills and keep Zomato running. To maintain services during the festive season, it has increased slightly."
Zomato first introduced a platform fee of Rs 2 in August 2023 as part of its strategy to improve margins and move towards profitability. This fee was later increased to Rs 3, followed by a hike to Rs 4 on January 1. Zomato temporarily raised the fee to Rs 9 on December 31 last year, before now settling on Rs 10.
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The impact of this Re 1 hike could be significant for Zomato, which reported an order volume of 647 million in FY23. A Re 1 increase would add Rs 65 crore to the company's topline annually.
In its Q2 results, Zomato reported a net profit of Rs 176 crore for the July-September period, higher by 388 per cent from the year-ago period's net profit at Rs 36 crore, but down 30 per cent sequentially from a net profit of Rs 253 crore in Q2FY25.
That apart, Zomato’s revenue from operations rose 69 per cent year-on-year (Y-o-Y) to Rs 4,799 crore in Q2, up from Rs 2,848 crore a year ago. It had reported a revenue of Rs 4,206 in the previous quarter.
In the past one year, Zomato shares have gained 144 per cent against Sensex's rise of 25 per cent.