Reliance Retail, the retail arm of Reliance Industries (RIL), on Friday reported a nearly 19% y-o-y jump in its June quarter (Q1) profit to Rs 2,448 crore, as consumer sentiment recovered across categories. Gross revenue rose 19.5% y-o-y to Rs 69,948 crore, the highest-ever reported by the retailer.
Revenue from operations rose 20.5% y-o-y to Rs 62,159 crore in Q1, as consumers lapped up groceries, consumer electronics and fashion and lifstyle products.
On the operating front, earnings before interest, tax, depreciation and amortisation (Ebitda) grew 33.9% y-o-y to Rs 5,139 crore, an all-time high. Ebitda margin for the quarter was 8.27%, up 83 basis points y-o-y, driven by efficiencies. Net profit margin was down marginally to 3.94% y-o-y versus 4% reported last year on higher depreciation and finance costs.
“The retail business delivered robust growth, with fast-paced store additions and steady growth in footfalls. The contribution of Digital and New Commerce initiatives is scaling up, delivering value to consumers and providing synergistic benefits to merchant partners,” RIL chairman Mukesh Ambani said on Friday.
Reliance Retail recorded highest-ever footfalls at 249 million across all formats and added 555 stores. The total store count stood at 18,446 at the end of the June quarter — a 16.3% jump over last year.
Digital Commerce and New Commerce businesses continued to grow and contributed to 18% of revenue, the company said.
“Electronics is seeing better average bill values as consumers buy bigger and better products,” Dinesh Taluja, chief financial officer, Reliance Retail, said in a post-result earnings call. “Public Holiday Sales’ events and regional promotions also drove growth in footfall and orders,” he added.
Analysts said that the retail division was able to leverage occasions such as the IPL in the June quarter to drive higher TV sales. Grocery was the star segment in Q1 delivering a 59% y-o-y revenue growth, led by Smart and Smart Bazaar stores.
The consumer electronics business, excluding devices, delivered 14% y-o-y revenue growth, while the fashion and lifestyle business delivered revenue growth of 15% y-o-y driven by an increase in store traffic and average bill value.
“AJio reported another strong quarter with sustained improvement across operational metrics. The business added 2 million new customers during the period along with several new brand launches across categories,” RIL said.
On consumer brands, RIL said the focus is on expanding distribution reach and engagement in general trade channel, delivering 8x y-o-y revenue growth.
The business also introduced new products in partnership with international brands, such as Alan’s Bugles in collaboration with General Mills and a range of deodorants with Europer perfumes.
“There was a sharp uptick in performance of the beverages category with sales growing 11x y-o-y led by Campa Cola gaining traction across the country,” the company said.
JioMart expanded its seller base 4x y-o-y in the quarter under review.