Reliance Retail net profit grows 36% in Q2; revenue up 44.5% YoY

Reliance Retail saw its (gross) revenue at Rs 64,920 crore, up 42.9 per cent year-on-year

Reliance Retail, the retail arm of Mukesh Ambani-led Reliance Industries, registered a 36 per cent rise in net profit at Rs 2,305 crore for the July-September quarter (Q2FY23) compared to last year, while its earnings before interest, taxes, depreciation, and amortisation (Ebitda) from operations jumped 75.9 per cent to Rs 4,286 crore.

The country’s largest retailer’s cash profit for the quarter rose 45 per cent to Rs 3,324 crore. Net revenue from operations surged 44.5 per cent year-on-year to Rs 57,694 crore, while gross revenue stood at Rs 64,920 crore, up 42.9 per cent.

The company said the quarter was marked by an operating environment similar to pre-Covid times as the pandemic’s impact waned. “Across town classes, consumer sentiment remained positive on the back of key promotional events and early onset of festivities,” it said in a release. 

“Our retail business delivered record performance with strong revival in footfall, store additions, and digital integration. Reliance Retail continues to provide a compelling proposition of great shopping experience and superior value across consumption baskets and price points,” Mukesh Ambani, chairman and managing director, Reliance Industries, said in a statement.

The company said the business delivered record revenue and profits during the quarter led by broad-based growth across all consumer baskets.

During the quarter, the retailer had 16,617 stores operational, and 795 new stores were opened. Also, the area of operation stood at 54.5 million sq ft. It is now the only Indian retailer with more than 50 million sq ft of retail space under operation. It also saw its registered customer base growing 28 per cent YoY to reach 221 million.

As consumers returned to stores, Reliance Retail received over 180 million footfall across formats and geographies in the quarter, a growth rate of 23 per cent over the pre-Covid period.

Reliance Retail added 5.4 million sq ft of warehousing space during the quarter. 

The retail major said digital commerce and new commerce businesses posted strong growth with daily orders up 53 per cent year-on-year and the merchant base was up two times over last year.

JioMart, its cross-category horizontal platform, continued its growth journey during the quarter. The platform strengthened its capabilities by augmenting the catalogue size and seller base multifold, it said. Its ‘Tyohar Ready Sale’ saw strong performance, resulting in 2.5 times growth in traffic and three times app installations. 

“Reliance Retail continues to invest in acquisitions and partnerships to enter new categories, strengthen our service capabilities and extend our reach to new markets. Each of the acquired businesses are on their way to becoming leaders in their own segments,” it said.  

During the quarter, Reliance Retail acquired a majority stake in Mayuri Kumkum, the company that owns and operates Insight Cosmetics.

In consumer electronics, Reliance Retail said, it witnessed strong double-digit growth driven by higher bill values and conversions as more and more customers visited its stores. It recorded its best-ever August 15th “Digital India Sale” with instant discounts, cross-category promotions, and a variety of affordability options that offered a superior value proposition to customers. 

The business had robust growth across all categories on the back of new product launches and attractive offers. Mobile phones, TVs and washing machines did particularly well with 30 per cent YoY growth.

In the fashion & lifestyle segment, Reliance Retail had a strong quarter as consumers shopped for the festive season. 

Its offline business has had its strongest quarter ever, with high double-digit like-for-like growth driven by higher average bill value and conversions from key festive events of Onam, Ganesh Chaturthi, Navratri, and Pujo.

During the quarter, the business introduced three new store concepts: Azorte, a tech-aided premium fashion and lifestyle store format; Centro- a fashion & lifestyle departmental store format; and Fashion Factory, a format that offers value deals across brands to serve discerning customers.

Its e-commerce platform, AJIO, continued to grow and saw another all-time high quarterly performance. 

The luxury-premium brands business grew as footfall in mall stores normalised and new stores were launched. AJIO Luxe, the online marketplace for luxury brands, experienced a threefold increase in revenues. 

Reliance Retail’s jewellery business grew steadily and the lingerie business more than doubled YoY with broad-based growth coming from Zivame, Amanté and Clovia brands. During the quarter, the business introduced its first shop-in-shop format within Trends stores, bringing a wider multi-brand assortment under one roof.

The grocery business delivered its best-ever quarter with business doubling over the last year, it said. Its stores registered high double-digit like-for-like growth with footfall and average bill values continuing to remain high as customers shopped for gifting and festivities in addition to their daily needs.

It also launched new brands and introduced new products such as Sure Packaged Water, Masti Oye Noodles, and Meister/Jive Deo and more.

The JioMart Kirana business onboarded four times merchants YoY. The business expanded its supply chain infrastructure by adding 57 new fulfillment facilities, increasing business reach and reducing merchant response time.