On the announcement related to increasing the platform fees, Zomato’s share price surged more than 4 percent to its 52-week high, as the move might resonate positively on the bottom line in key markets like Bengaluru and Delhi.
Its share price surged over 4 percent to a fresh 52-week high in Monday’s trading session on the back of food delivery platform Zomato’s decision to hike its platform fee from ₹5 to ₹6. The move is likely to add to profitability in certain geographies, such as Bengaluru and Delhi.
Zomato also entered the elite club of firms whose market capitalization crossed ₹2 trillion on Monday. The stock opened the day at an intraday low of ₹225 per share on the BSE before zooming up to touch an intraday high of ₹232 per share. The share price of Zomato has increased by nearly 83 percent in 2024.
“Zomato’s share price had formed a higher top, higher bottom structure recently, which is an uptrend. The 20-day DEMA at 206 should act as good near-term support, while the resistance should be seen near the ₹245-250 zone,” said Ruchit Jain, Lead Research Analyst, 5paisa.
The stock price has gained 173.8% in one year, according to Trendlyne data, outperforming its sector by 129.31%. Kushal Gandhi, Technical Analyst at StoxBox, said, “The share price of Zomato has rallied over 450% from the lows made in July 2022. The chart witnessed a strong bullish breakout above its earlier high of 169, after which a short accumulation phase hinted that further upside momentum might continue with the backing of investors as well. Daily and higher timeframe RSI levels are still way above average, indicating strong upward momentum.”.
Zomato is spread across 23 countries and has emerged as one of the top food aggregators in India. It has pegged a 73.3 percent on-year growth in revenues at ₹3,562 crore for Q4FY24, supported by an increase in platform fees, average order value, expansion of customers, and effective management of expenses. Earnings before interest, taxes, depreciation, and amortisation stood at ₹86 crore.
Ahead of its Q4 results, Zomato had increased the platform fee from ₹4 to ₹5 per order, increasing it by 25%. This came into effect on April 20. Geojit Financial Services has expected major growth in the rapid commerce and meal delivery reported segments of Zomato on the back of an increasing customer base, increasing order frequency, a rising network of delivery partners, as well as operational efficiencies.
