Mukesh Ambanis Reliance Retail profit up fivefold at Rs 363 cr

Written by fe Bureau | Mumbai | Updated: Apr 19 2014, 06:33am hrs
REtailRationalisation of formats, like-to-like growth drive earnings. PTI
Mukesh Ambanis Reliance Retail has reported profit before depreciation, interest and taxes (PBDIT) of R363 crore for FY14, an almost fivefold rise from R78 crore in the previous year, on the back of stronger like-to-like growth across formats and rationalisation of some formats.

Reliance Retail added 225 stores and 2.7 million operating square feet during the year across all formats, which led to 34% higher revenue at R14,496 crore. At a time when most retailers are consolidating either going slow on expansion or closing unviable stores Reliance is putting in more money to open stores.

The retail business has turned around and is now Indias largest chain. We have also accelerated efforts to roll out our state-of-the-art 4G services across the country , which will add an exciting new dimension to our consumer-facing service offerings, said Mukesh Ambani, CMD, RIL.

Like-to-like sales grew by up to 23% while the company saw like-to-like growth of 7-18% across all formats. In the fourth quarter, revenue grew 19% to R3,639 crore compared to R3,051 crore in the same period previous year. The company had closed its leisure chain of stores, Reliance TimeOut, and Reliance Delight stores, the chain that sold non-vegetarian products, helping it rationalise formats to control costs.

Achieving scale of operations and a frugal approach towards costs has helped the retail business to post stronger profit. We are expecting our retail business to grow at 25-30% on a CAGR basis, said RIL cfo Alok Agarwal.

Reliance Market, the cash-and-carry format, expanded rapidly and has 32 stores. The company has been slowly converting some of its neighbourhood retail stores into cash-and-carry stores. Reliance Retail operates 1,691 stores across 146 cities, with 11.7 million of operating sq ft, and claims to be the market leader in most sectors it operates in.

The conglomerate's telecom arm, which has been signing agreements for the imminent launch of its 4G services, has been hiring aggressively. The company's employee base stands at about 3,000 currently from 700 employees last year, according to a company statement.

Reliance Jio has finalised the key vendor and supplier partnerships that are required for the launch of its services, and is building infrastructure.

In the recently concluded spectrum auctions, Reliance Jio successfully acquired 1800 MHz spectrum across 14 circles to strengthen in-building coverage in LTE. Reliance Jio plans to provide seamless 4G services using FDD-LTE on 1800 MHz and TDD-LTE on 2300 MHz through an integrated ecosystem, the company said.