India’s food delivery giant Zomato (now renamed Eternal Ltd) is quietly transforming into something much bigger than just a food delivery app. With strong execution in its core business and rapid expansion through Blinkit (quick commerce) and Hyperpure (B2B supply chain), the company is building a multi-engine growth model.
At a time when investors are questioning valuations in new-age tech stocks, brokerage Elara Securities has reiterated a ‘Buy’ rating on Eternal, assigning a target price of ₹415 per share.
Let’s break down what’s driving this bullish outlook—and whether the optimism is justified.
Platform Fee Hike: A Small Change, Big Impact
One of the biggest triggers behind Elara’s positive stance is Zomato’s consistent increase in platform fees.
The company recently raised its platform fee to ₹15 per order, aligning itself with competitor Swiggy. While this may look like a minor change on the surface, the financial impact is significant.
Since its introduction in August 2023 at just ₹2 per order, the platform fee has increased 7.5 times, and interestingly, this has happened with minimal resistance from users.
Why This Matters
Elara estimates that:
- Every ₹1 increase in platform fee can lead to
→ 26 basis points increase in take rate
→ Around 5% improvement in EBITDA
This is crucial because:
👉 It improves profitability without increasing costs
👉 It directly boosts margins in a high-volume business
Even at ₹15, the platform fee is only about 3.1% of the average order value (₹475), which suggests that consumers are not highly sensitive to this increase.
Food Delivery Business: Still the Core Engine
Zomato’s food delivery business continues to remain its primary revenue driver.
Despite concerns around slowing industry growth in certain quarters, the company has shown resilience.
Key Observations
- Platform fee hikes have not negatively impacted order growth (GOV)
- Demand remains stable, even with gradual price increases
- The company continues to focus on:
- Improving take rates
- Enhancing operational efficiency
Elara values the food delivery segment at a premium 55x EV/EBITDA, reflecting confidence in its long-term profitability.
Blinkit: The Real Growth Multiplier
If there’s one segment that could redefine Zomato’s future, it’s Blinkit.
Quick commerce is rapidly gaining traction in India, especially in urban markets where convenience is becoming a priority.
Why Blinkit Matters
- Faster delivery (10–20 minutes) is changing consumer behavior
- High-frequency usage compared to food delivery
- Expanding into categories beyond groceries
Elara values Blinkit at 5x EV/Gross Profit, indicating strong confidence in its scalability.
The Bigger Picture
Blinkit is not just an add-on—it’s becoming:
👉 A daily-use platform
👉 A high-growth vertical
👉 A key driver for future valuation re-rating
Hyperpure: The Silent Growth Driver
While most attention goes to food delivery and Blinkit, Hyperpure—Zomato’s B2B restaurant supply business—is quietly building scale.
What Makes Hyperpure Interesting
- Supplies raw materials directly to restaurants
- Creates deep ecosystem integration
- Strengthens relationships with restaurant partners
Elara values this segment at 3x EV/Sales, reflecting steady but underappreciated growth potential.
Valuation Breakdown (As Per Elara)
Elara’s ₹415 target price is based on a sum-of-the-parts valuation:
- Food Delivery → 55x EV/EBITDA
- Blinkit → 5x EV/Gross Profit
- Hyperpure → 3x EV/Sales
This approach highlights that Zomato is no longer a single-business company—it’s a platform with multiple revenue streams.
