Indian food delivery company Zomato’s loss narrows to one-time gain

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Indian food delivery company Zomato reported a smaller third-quarter loss on Thursday, helped by a one-time gain from a stake sale, while revenue jumped on higher demand for restaurant meals.

Zomato’s restaurant business, which offers customers discounts and deals when they eat at partner restaurants, has strengthened as restaurants and bars reopened after a drop in Covid-19 cases over the past quarter, while the company’s core food delivery business continued to grow.

“The restaurant food renaissance (in the third quarter) resulted in green shoots in our restaurant advertising sales business,” the Gurugram-based company said in a regulatory filing.

Zomato also said it will increase the upper limit of its potential investments over the next two years in the fast trade market to $400 million.

India’s fast-paced commerce and hyperlocal delivery space has attracted investors over the past year, with Google and Reliance Industries investing in Bengaluru-based startup Dunzo.

Zomato has also invested about $225 million over the past year in delivery company Blinkit, logistics technology company Shiprocket and neighborhood business discovery app Magicpin.

Gross order value, or the total monetary value of all food delivery orders placed on Zomato’s online platform, increased 84.5% year-on-year to Rs 55 billion ( $733.07 million), while orders jumped 93%.

The company’s consolidated net loss narrowed to 632 million rupees for the three months ended December 31, from 3.53 billion rupees a year earlier, helped by a one-time gain of 3.16 billion rupees from from the sale of its stake in Fitso, an online platform. that helps people discover sports venues.

Operating income increased by 82.5% to 11.12 billion rupees.

Shares in Zomato have fallen 25% since listing in July last year amid broader market weakness due to valuation concerns and expectations of monetary policy tightening by global central banks.

  • Reporting by Anuron Kumar Mitra in Bengaluru; Editing by Sriraj Kalluvila and Vinay Dwivedi of Reuters.
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