Blinkit Disruptions: Zomato sees no material impact on financial performance; stock jumps 4%
"These disruptions and changes have no material impact on the operations /financial performance of the Company (meaningfully less than 1% revenue impact) and hence we believe that this event does not warrant any disclosure under regulation 30 of t...
By Shivendra Kumar, ETMarkets.com | Updated:
Reuters
NEW DELHI: Food delivery platform Zomato on Wednesday said it has made changes in the delivery partner payout structure with respect to the Blinkit business to address the needs of delivery partners. It further claimed that the current disruptions will not have any material impact on the operations and financial performance of the company.
"These disruptions and changes have no material impact on the operations /financial performance of the Company (meaningfully less than 1% revenue impact) and hence we believe that this event does not warrant any disclosure under regulation 30 of the SEBI (LODR) Regulations, 2015," the company claimed.
Zomato in its filing to the exchanges said the move has been made to "improve customer experience and reduce cancellation/ order rejection frauds by few delivery partners in the system. Such changes are done from time to time, as needed".
The quick commerce platform Blinkit is facing opposition from its delivery partners for lowering the payout for every delivery. The company has reduced the payout from earlier Rs 25 to Rs 15 for each delivery. This has led to protests by several delivery partners across the Delhi-NCR region. The delivery partners feel that this will considerably reduce their earnings.
"We had to shut down some stores for a few days to ensure safety of our employees at stores and the delivery partners. Most of these stores have now resumed operations," the company filing said.
Meanwhile, brokerage firm UBS has maintained its buy rating on Zomato with a target price of Rs 80. The global investment bank slashed its FY24-25 food delivery GOV for Zomato by 10%.
Relaunch of subscription and adjustment in delivery fee/discounts is helping Zomato reverse share loss, said the note.
The brokerage also highlighted Swiggy gaining share in the past six months due to more pronounced increases in Zomato's delivery fees.
"These disruptions and changes have no material impact on the operations /financial performance of the Company (meaningfully less than 1% revenue impact) and hence we believe that this event does not warrant any disclosure under regulation 30 of the SEBI (LODR) Regulations, 2015," the company claimed.
Zomato in its filing to the exchanges said the move has been made to "improve customer experience and reduce cancellation/ order rejection frauds by few delivery partners in the system. Such changes are done from time to time, as needed".
The quick commerce platform Blinkit is facing opposition from its delivery partners for lowering the payout for every delivery. The company has reduced the payout from earlier Rs 25 to Rs 15 for each delivery. This has led to protests by several delivery partners across the Delhi-NCR region. The delivery partners feel that this will considerably reduce their earnings.
"We had to shut down some stores for a few days to ensure safety of our employees at stores and the delivery partners. Most of these stores have now resumed operations," the company filing said.
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Zomato shares were trading at Rs 55.30 on NSE, up 3.75% from their previous close.Meanwhile, brokerage firm UBS has maintained its buy rating on Zomato with a target price of Rs 80. The global investment bank slashed its FY24-25 food delivery GOV for Zomato by 10%.
Relaunch of subscription and adjustment in delivery fee/discounts is helping Zomato reverse share loss, said the note.
The brokerage also highlighted Swiggy gaining share in the past six months due to more pronounced increases in Zomato's delivery fees.
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