Reliance Retail sees 23.4% rise in net profit; revenues up 53.4%

Reliance Retail, a subsidiary of Reliance Industries, saw its net profit jump by 23.4 per cent year-on-year (YoY) to Rs 2,259 crore in the December quarter of financial year 2021-22 (Q3FY22) with cash profit higher by 32 per cent at Rs 3,277 crore.

The company’s revenues increased 53.4 per cent YoY to Rs 50,654 crore in Q3 as gross revenue from all the consumption baskets, excluding petroleum and connectivity, grew by a whopping 90 per cent over the previous year.

“Retail business activity has normalised with strong growth in key consumption baskets on the back of festive season and as lockdowns eased across the country,” said Mukesh Ambani, RIL’s chairman and managing director, commenting on the Q3 results.

The company also said in its release that it recorded all-time high revenues across all consumption baskets driven by the highest-ever store sales and sustained growth momentum in digital and new commerce segments.

It also said consumer electronics and apparel and footwear doubled their business on the back of strong festive sales while grocery sustained its consistent and strong double-digit growth momentum.

Reliance Retail’s Ebitda (earnings before interest, taxes, depreciation, and amortisation) grew by 52.3 per cent YoY to Rs 3,522 crore, led by strong revenue recovery, operating leverage, and favourable revenue mix contributed by growth in the fashion and lifestyle, consumer electronics and grocery segments, it said.

 In Q3, the retail business added 837 stores taking its total store count to 14,412. It also added 73 warehouses and fulfillment centres across 2.3 million sq ft. Its merchant partners grew four times compared with last year, while its digital commerce orders grew two times.

Reliance Retail’s consumer electronics stores posted strong double-digit growth with improvement across all operating parameters, the company said.

“Extended festive offers during Diwali, Black Friday, Christmas gained significant traction with customers resulting in higher conversions and average bill values. ResQ registered double-digit growth as the business continues to delight customers with faster installations and value-added services,” the release said.

 Reliance Retail also launched JioMart Digital, a merchant business for consumer electronics.

The retailer said over 50 per cent of its shoppers were from tier-2 and below cities.

In the fashion and lifestyle business, it delivered its highest-ever quarterly revenues with twofold growth over the year-ago period aided among other things by growth in average bill values that resulted in robust store performance.

It’s online fashion retail brand, AJIO, also recorded new highs with threefold growth in revenue and it also grew its catalogue 2x YoY as it added national and regional brands, and strengthened its own brand portfolio in the value segment.

In its jewellery business, it continued its strong growth trajectory with double-digit YoY growth led by new collections, while the luxury/ premium brands grew 2x with resumption of mall stores and rebound in footfall.

It launched multiple new store formats and opened 64 new partner brand stores in Q3 and Reliance Brands signed up partnerships with Valentino, La Martina and Starter. Urban Ladder grew 2x in Q3.

“As we look forward to the next quarter what we see is that there has been some volatility, which has come with the new Covid strain, but we believe we are well prepared to navigate through the challenges that are posed by it,” said Gaurav Jain, head of strategy and business development at Reliance Retail, after the earnings were released.

“As the situation normalises, our focus would remain on accelerating the growth momentum and also expansion. Some of the priority areas are to ensure that we will continue to increase the pace of our new store roll out,” he added.

The retailer will also look at scaling up its digital commerce businesses across all platforms. It will augment offers and also sharpen service capabilities.

Jain said, “New commerce value proposition has been really received well across all businesses and we will continue to on board merchants across geographies and also grow the share of businesses as they continue to buy more”