Food Delivery Take-Rate Economics
Food delivery looks like a logistics business but prices like an advertising platform. Zomato charges restaurants a commission, collects delivery fees from users and monetizes placement through ads, together producing a blended take rate near 19 to 20 percent of gross order value by financial year 2025. Incremental advertising revenue flows through at very high margins, which is why contribution margins improved even as delivery costs rose. The metric worth tracking is GOV growth against marketing spend, not headline revenue. Delivery cost per order falls as order density rises, which is why profitability improved fastest in the oldest, busiest cities.
Advertising is the quiet second engine. Restaurants bid for placement the way brands bid for shelf space, and by FY25 ad income was adding several percentage points to the effective take rate without a rupee of extra delivery cost. Software-style margin hiding inside a delivery business is what turned consolidated EBITDA positive.
Two-sided networks turn sticky once restaurant density and rider density reinforce each other. India effectively consolidated to two players by 2023, and concentration is when take rates finally stop discounting themselves away.
From the 76 Rupee IPO to the Drawdown
Zomato listed on July 23, 2021, opening at 115 rupees against a 76 rupee issue price, then ran to about 169 by November on liquidity and scarcity. Rate hikes arrived the following year and the story unraveled. The stock ground down to the mid-40s by mid-2022, a 74 percent peak-to-trough collapse, and drifted between 50 and 70 through most of 2023 while skeptics counted cash burn. What the bears missed was the balance sheet, since a debt-free operator with 11,000 crore of cash could carry Blinkit losses for years without rescue funding.
The Blinkit Pivot
The June 2022 acquisition of loss-making quick commerce startup Blinkit, an all-stock deal valued near 4,447 crore rupees, was openly mocked at the time. It aged into the best decision management made. Quick commerce GOV compounded at triple-digit rates through FY24 and FY25, dark store density in big metros created a genuine moat, and Blinkit moved from value destroyer to the growth engine that institutional money re-rated the stock for.
Groceries ordered and delivered inside fifteen minutes sounded like a stunt until frequency data showed customers building weekly habits around it. The capital intensity is real, but so is the willingness to pay for time saved.
The 2023-24 Recovery
The first quarterly net profit landed in the June 2023 quarter, barely two crore rupees, but symbolically enormous. Financial year 2024 closed with 351 crore of profit, and financial year 2025 with roughly 2,600 crore. The share crossed 100 early in 2024, 200 by midyear, touched the low 300s after the festive season, then absorbed a fresh drawdown in 2025 as quick commerce competition intensified. From the mid-40 low to the 2024 peak, the move ran roughly sevenfold in two and a half years.
Ownership changed character along the way. Foreign institutions that fled in 2022 returned through 2024, domestic funds built focused allocations, and lock-up lapses expanded the float without breaking the trend. Along the way the company entered benchmark indices and renamed itself Eternal, folding food delivery, Blinkit and the supplies business under one holding brand.
Tracking It on KanokInvest
KanokInvest screens food delivery and quick commerce names side by side, with GOV, take rate and contribution margin lines updated each quarter. Set alerts on monthly operating disclosures, because this story trades on operating data more than on annual reports. Clients on KanokInvest who held through the 2022 trough were paid for ignoring price and watching unit economics turn, and the same discipline applies now: the bull thesis depends on Blinkit compounding and ad take-rate expansion, the bear case on rider wage pressure and a third competitor rebuilding from scratch. Size the position so either outcome is survivable.