Indian food delivery platform Zomato reported a quarterly profit that beat market expectations on Thursday (Feb 8), aided by increased demand during the men’s Cricket World Cup and the festive period.

Shares, which had climbed 22 per cent in the December quarter, rose more than 3 per cent after Zomato posted a profit for the third straight quarter.

The company reported a consolidated net profit of 1.4 billion rupees (S$22.7 million) for the third quarter ended Dec 31, beating analysts’ estimate of 909.8 million rupees, according to LSEG data. It had reported a net loss of 3.47 billion rupees a year earlier.

Indian consumers ordered in more during the men’s Cricket World Cup, which took place between Oct 5 and Nov 19. This, coupled with the festive season – when Zomato and its SoftBank-backed rival Swiggy bring in a lion’s share of their yearly sales – helped boost the top line.

Zomato’s contribution margin – a key profit metric – expanded to 7.1 per cent from 6.6 per cent in Q2 due to the introduction of a fee for customers to use the food delivery platform.

Zomato’s gross order value (GOV) – the total value of all orders placed – at Blinkit, its grocery delivery business, more than doubled, while its mainstay food delivery business grew 27 per cent for the quarter.

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This helped total revenue jump 69 per cent to 32.88 billion rupees.

Zomato, however, said growth in its food delivery segment was below its expectations due to “muted” demand.

The company expects the GOV to increase more than 20 per cent in the coming quarters, it said. Reuters