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Fee Hikes Explained
India's top food delivery platforms, Swiggy and Zomato, have both raised their per-order platform fees to ₹17.58, including GST. Swiggy's new fee is ₹2.59 higher than its previous ₹14.99 charge, a jump of over 17%. Zomato similarly increased its pre-GST fee by 19.2%, leading to the same ₹17.58 final cost. These adjustments are a key part of the companies' strategy to boost profitability by taking a larger slice of each order's value. Fees have climbed significantly since their introduction, with Swiggy's starting at ₹2 in April 2023 and Zomato's at ₹2 in August 2023.
Market Reaction and Investor Bets
These fee increases come as the Indian food delivery market shows signs of maturity. While sectors like quick commerce face stiff competition, the main food delivery business, largely controlled by Zomato and Swiggy with about 90% of the market, is showing better earnings per order. Analysts like Karan Taurani, EVP at Elara Capital, believe the strong market position of these two companies makes it unlikely for new rivals to cause major disruption soon. Investors seem to agree. Even with higher charges for customers, stocks of other platform companies such as Urban Company and Meesho rose after the news, signaling confidence in the sector's ability to raise prices. Zomato's stock, trading around ₹232.10 on March 23, 2026, has seen price swings but continues to get analyst backing due to these profit-driving measures.
Zomato's Financials & Analyst Views
Zomato's financial results highlight the potential impact of its pricing strategy. The company reported strong revenue growth exceeding 200% year-on-year in Q3 FY26, reaching ₹16,663 crore, with its Indian food delivery business being a major contributor. Its market value is around ₹2.19 trillion, with a trailing twelve-month (TTM) price-to-earnings (P/E) ratio that has varied widely. Elara Capital estimates that each ₹1 increase in platform fees could boost Zomato's revenue per order by roughly 0.26% and add about ₹1.2 billion to its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). If these fees are adopted widely across the market, it could increase FY27 adjusted EBITDA by about 7.5%. Analysts at Bernstein have a 'Buy' rating with a ₹370 target price, and Elara Securities has a ₹415 target, both indicating confidence in future growth driven by these profit-improving actions. On March 24, 2026, the Indian tech sector showed mixed but steady performance, with IT stocks rising.
Risks and Challenges Ahead
However, potential risks remain. The most direct effect of higher fees is on customer spending habits. While Zomato and Swiggy have seen continued demand, with Zomato's monthly users growing about 22%, customers sensitive to price might order less often or place larger orders per delivery. New competitors, such as Rapido's Ownly which charges no platform fees, could challenge the leading companies' ability to set prices, though their current market impact is small. Zomato's high P/E ratio, often exceeding 900, indicates a substantial valuation that requires sustained high growth and profitability to justify. The platform fee, though high-margin, is a small part of the total order value. Its ability to cover rising operational costs like fuel prices is still being closely watched. Additionally, past stock performance has shown negative momentum, indicating potential for further drops if market sentiment or company issues worsen.
What's Next for Food Delivery
Swiggy and Zomato's platform fee increases signal a push for lasting profitability. Analysts forecast Zomato's adjusted EBITDA margins could hit 6% by FY28, in line with company forecasts. The steady fee hikes, bringing Swiggy and Zomato closer in pricing, suggest a coordinated strategy by the market leaders. Future growth will depend on the companies balancing higher prices with strong user numbers and order volumes, especially with new, low-fee rivals emerging. How customers respond to these price changes will be key to understanding how much they can tolerate increases and the overall development of India's online food delivery sector.