Indian food delivery platform Zomato reported a quarterly profit that beat market expectations on Thursday, aided by increased demand during the men's Cricket World Cup and the festive period.
Shares, which had climbed 22% in the December quarter, rose more than 3% after Zomato posted a profit for the third straight quarter.
The company reported a consolidated net profit of 1.38 billion rupees ($16.6 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 topline.
Zomato's contribution margin - a key profit metric - expanded to 7.1% from 6.6% in the second quarter 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%for the quarter.
This helped total revenue jump 69% 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% in the coming quarters, it said.