Zomato Parent Eternal Raises Platform Fee Ahead Of Festive Season SEBI Analyst Advises Caution On Bearish Technicals

Shares of Eternal rose nearly 2% on Wednesday, after it hiked Zomato's platform fee from ₹10 to ₹12 ahead of the festive season. The move represents a 20% hike and comes less than a year after the last revision.

Eternal is the parent company of restaurant food delivery app Zomato and quick commerce platform Blinkit.

The latest hike continues a trend of incremental increases as the company looks to improve revenue and operational efficiency. Zomato first introduced the fee at ₹2 in August 2023 to improve margins and aim for profitability. Since then, the charge has been revised several times.

It increased to ₹3 in 2023, ₹4 in January 2024, after being briefly raised to ₹9 in December 2023. By October 2024, the fee was adjusted to ₹7, before being lifted again to ₹10 later that month during the festive season, branded as a“festive season platform fee”.

Analyst Take

The timing of the hike, just before the festive season, is expected to boost revenue as food delivery demand typically rises during this period. From a fundamental perspective, the move is seen as positive for margins and long-term profitability, said SEBI-registered analyst Vatsal Khemka.

On the technical side, the stock's near-term outlook appears weak, Khemka said, suggesting a bearish trade strategy with a selling price in the range of ₹329 - ₹330. He recommends a stop-loss at ₹332, sees a downside target of around ₹300.

Margin Pressure Dents Q1 Earnings

Eternal's consolidated revenue grew 70% in Q1 to ₹7,167 crore. However, net profit slumped 90% to ₹25 crore from ₹253 crore the previous year, indicating margin pressures. Blinkit posted a revenue of ₹2,400 crore, surpassing Zomato's revenue of ₹2,261 crore. 

Stock Watch

Despite significant gains, retail sentiment for Eternal has remained 'bearish' on Stocktwits. It was 'neutral' six months ago.

During the six-month period, Eternal's stock climbed a massive 46.8%. Its YTD gains are comparatively modest at 17%.

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