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New Delhi: Zomato, the popular food delivery platform, announced an unexpected second consecutive quarterly profit, driven by increased food delivery orders, with expectations of further growth during the ongoing festive season. The net profit for the quarter ending September 30 was 360 million rupees, surpassing analyst predictions of a 201.7 million rupee loss. This marks a significant turnaround from the company’s previous loss reported in the same period last year.
The company’s Gross Order Value (GOV) for food delivery orders saw a 20% increase, primarily due to higher order volumes and increased usage of the paid “Gold” subscription service by customers.
Zomato’s shares saw an 8.3% increase, contributing to a year-to-date gain of over 96%.
Chief Financial Officer Akshant Goyal expressed optimism, suggesting that GOV for this segment could grow by 25% to 30% in the third quarter ending December 31. With the festive season, which includes Christmas and Deepavali, underway, Indians traditionally increase their spending on sweets, snacks, and clothing, providing a boost to consumer-facing companies.
Food business CEO Rakesh Ranjan acknowledged that the festive period typically presents a mixed scenario for the food delivery industry, with people dividing their spending between ordering in and dining out. Additionally, the ongoing Cricket World Cup, running from October 5 to November 19, is expected to lead to additional orders, although the demand surge is anticipated to be limited to match days.
The demand for online food ordering has seen substantial growth in recent years, prompting platforms like Zomato and its rival Swiggy to aggressively expand their services. Zomato reported a remarkable 71% increase in revenue from operations, reaching 28.48 billion rupees in the second quarter.
