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Zomato posts net profit in Q3, revenue from quick commerce more than doubles

By Reuters

  • 08 Feb 2024
Zomato posts net profit in Q3, revenue from quick commerce more than doubles
Credit: VCCircle

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.

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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.

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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.

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