Zomato posts surprise Q2 profit, expects more during festive season
Net profit stood at Rs 360 million in the second quarter ended September 30.
New Delhi:
Zomato today reported its second consecutive quarterly profit, an unexpected result driven by increased food delivery orders which the company expects will be even higher during the current festive season.
Net profit stood at 360 million rupees in the second quarter ended September 30, beating analysts’ expectations of a loss of 201.7 million rupees, according to LSEG. She reported a loss last year.
Gross order value (GOV) – the total value of all food delivery orders placed – for the food sector increased by 20%, driven by higher orders and subscription customers paying “Gold” users used the service more frequently.
Shares ended the session up 8.3%, bringing year-to-date gains to more than 96%.
GOV in the segment could grow between 25% and 30% in the third quarter ending December 31, Chief Financial Officer Akshant Goyal said in a letter to shareholders.
Indians typically splurge on everything from sweets to snacks to clothing during the festive quarter, which includes Christmas and the Hindu festival of Deepavali, helping consumer-facing businesses record sales growth disproportionate.
Food CEO Rakesh Ranjan said the holiday season is “usually a mix of things for the food delivery industry,” adding that people split their spending between ordering in and dining out. .
The ongoing Cricket World Cup, which runs from October 5 to November 19, is expected to result in additional orders, he said, while cautioning that the rise in demand would not be significant and would be limited to match days.
Demand for online food ordering has largely increased in recent years, prompting delivery service providers such as Zomato and rival Swiggy to expand aggressively.
Zomato’s operational revenue soared over 71% to Rs 28.48 billion in the second quarter.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
