- Macquarie warns high take-rates in India's food delivery may not be sustainable
- Zomato's net revenue per order rose from 21% in FY20 to 25.4% in Dec quarter
- Higher restaurant commissions drove margin gains and improved EBITDA margins
Macquarie has flagged risks to India's food delivery economics, cautioning that elevated “take-rates” — the percentage of each order value that platforms retain as revenue through restaurant commissions, advertising income and customer fees — may not be sustainable at current levels. The brokerage has reiterated its ‘Underperform' rating on both Eternal (Zomato's parent entity) and Swiggy, citing valuation vulnerability if take-rates compress.
In a Feb 24 note, Macquarie said Zomato's food delivery net revenue per order has expanded from 21% in FY20 to about 25.4% in the latest December quarter, marking a roughly 450 basis-point increase. The gains have been led by higher restaurant commissions, including ad and sponsored listings, which have climbed to over 22%, while customer fees have moderated to around 3%.
Margin Gains Built on Higher Commissions
The brokerage noted that since FY23, the expansion in take-rates has supported stronger contribution margins and helped lift adjusted EBITDA margins from near zero to roughly 5% of net order value. Swiggy has seen a similar improvement trajectory, though it continues to trail Zomato by about 150 basis points, reflecting scale differences.
Consensus forecasts assume these margin gains are durable. Street estimates build in a 6% adjusted EBITDA margin (as a percentage of net order value) for Zomato's food delivery business by FY28 and beyond, and about 5% for Swiggy, largely on expectations that the duopolistic structure will hold and pricing discipline will persist.
Valuation Sensitivity a Key Concern
Macquarie estimates the market currently ascribes a valuation of roughly $12–14 billion to Zomato's food delivery business, based on long-term gross order value growth of 18–20% and a 6% EBITDA margin.
However, the brokerage underscored how sensitive these valuations are to changes in assumptions. A 100 basis-point reduction in terminal margin or take-rate assumptions could trim fair value by $1–1.5 billion. Likewise, every 100 basis-point cut in long-term growth estimates could reduce valuations by about $0.5 billion.
While acknowledging that Zomato and Swiggy are likely to maintain leadership in food delivery, Macquarie said its fair value estimates sit 30–35% below consensus, reflecting more conservative long-term growth and margin assumptions.
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