Demand picked up in the quarter during the festive season when Indians spend heavily on big-ticket items such as cars, electronic appliances, and jewellery.

The Indian jeweller's consolidated net profit rose to 1.49 billion rupees ($18.02 million) for the third quarter that ended Dec. 31 from 1.35 billion rupees ($16.33 million) a year earlier.

Revenue increased 13% to 38.84 billion rupees, boosted by sales at newly opened showrooms.

The Thrissur, Kerala-based company's revenue from the Middle East, which accounts for 17% of total business, grew 24%. Gross margins improved, led by growth in the studded segment.

The company is "seeing robust momentum" this quarter, despite a sustained increase in gold prices, with the ongoing wedding season - when Indians splurge on gold ornaments - driving consumer visits and revenue, Ramesh Kalyanaraman, executive director, said in a statement.

The jeweller plans to open 52 new showrooms this year and has already hired 900 workers to open more than 20 new stores in time for Akshaya Tritiya - an Indian festival considered auspicious for investments in gold - in April.

Kalyan's earnings outshine its Tata Group-owned larger rival Titan Co Ltd, which last week reported a surprise fall in profit.

($1 = 82.6930 Indian rupees)

(Reporting by Varun Vyas; Editing by Dhanya Ann Thoppil)