Zomato’s Platform Fee Hike Fuels Eternal Share Surge: A Deeper Look
Shares of Eternal Limited experienced a notable 3% jump Friday, spurred by Zomato’s recent decision to increase its platform fee by Rs 2.40 per order. The stock, trading on the NSE, climbed from a low of Rs 230.10 to a high of Rs 236.70, ultimately closing at Rs 232.41, a 1.60% increase from the previous day’s close.
The Impact of Platform Fees on Food Delivery Giants
Zomato’s platform fee now stands at Rs 14.90 per order (pre-GST), a rise from the previous Rs 12.50. This adjustment, the first since September 2025, mirrors a similar strategy employed by competitor Swiggy, which currently charges Rs 14.99 per order including taxes. The parallel moves suggest a broader industry trend towards optimizing revenue streams through direct customer fees.
This isn’t happening in a vacuum. New competition is emerging, with Rapido launching its food delivery service, Ownly, in Bengaluru, differentiating itself by forgoing additional fees beyond delivery charges. This competitive pressure likely influences the fee adjustments by established players like Zomato and Swiggy.
Eternal’s Performance and Recent Financials
Despite the positive reaction to the Zomato fee hike, Eternal shares have faced headwinds in the past six months, experiencing a 30% correction. This underperformance contrasts with the Nifty and BSE Sensex, which saw declines of 9% and 10% respectively during the same period. The stock is currently trading below its 50-day (Rs 265) and 200-day (Rs 291) simple moving averages.
However, Eternal’s recent financial results reveal strong growth. Consolidated net profit rose 73% year-over-year to Rs 102 crore, while revenue from operations surged 201% to Rs 16,315 crore. A significant portion of this revenue growth is attributed to an accounting shift in its quick commerce arm, Blinkit, now recognizing the full value of goods sold.
Growth in Food Delivery and Quick Commerce
Eternal’s food delivery business saw adjusted revenue increase by 26% year-over-year to Rs 2,413 crore. Net Order Value (NOV) increased by 17% year-over-year, accelerating from 13.8% growth in the previous quarter. Gross Order Value (GOV) growth for the third quarter reached 21% year-over-year. Consolidated EBITDA increased 28% YoY to Rs 364 crore, and 63% QoQ.
The Competitive Landscape and Future Trends
The food delivery market is becoming increasingly competitive. While Zomato and Swiggy dominate, the entry of players like Rapido’s Ownly signals a potential shift in strategy, focusing on lower fees to attract customers. This could lead to a price war or a greater emphasis on value-added services to differentiate offerings.
The accounting shift at Blinkit, recognizing full revenue from goods sold, is a noteworthy trend. This approach provides a more accurate representation of the quick commerce business’s scale and profitability. Other companies in the sector may adopt similar accounting practices.
FAQ
Q: What caused Eternal’s share price to increase?
A: Zomato’s increase in platform fees by Rs 2.40 per order led to increased investor confidence in Eternal, resulting in a 3% share price jump.
Q: How does Zomato’s platform fee compare to Swiggy’s?
A: Swiggy currently charges Rs 14.99 per order, including taxes, while Zomato’s new fee is Rs 14.90 pre-GST.
Q: What is driving Eternal’s revenue growth?
A: Revenue growth is primarily driven by an accounting shift in its quick commerce arm, Blinkit, recognizing the full value of goods sold.
Q: Has Eternal been performing well overall?
A: While Eternal’s recent financials show strong growth, its share price has experienced a 30% correction in the past six months.
Did you know? Eternal’s quick commerce arm, Blinkit, saw a significant impact from the change in accounting practices, boosting reported revenue.
Pro Tip: Keep an eye on the competitive dynamics between Zomato, Swiggy, and new entrants like Rapido, as this will likely influence pricing and service offerings in the food delivery market.
Stay informed about the latest market trends and company performance. Explore more articles to deepen your understanding of the evolving landscape of food delivery and quick commerce.
