Reliance Retail, the country’s largest organised retailer, on Friday reported a 14.1% year-on-year (y-o-y) decline in net profit to Rs 2,805 crore amid higher depreciation and investment in its quick commerce business. However, revenue growth in Q1 held up supported by a broad-based performance across consumption baskets, the company said in a post-results earnings call on Friday.
Gross revenue for the quarter stood at Rs 90,408 crore, up 7.4% y-o-y including the fast-moving consumer goods (FMCG) business. When adjusted for the demerged FMCG business, Q1 gross revenue grew 11.6% versus last year, the company said. Net revenue grew 8.2% to Rs 79,745 crore, driven by double-digit growth across grocery, electronics, and the fashion and lifestyle segments.
Rising Infrastructure Costs
Earnings before interest, tax, depreciation and amortisation (Ebitda) declined 1.8% y-o-y to Rs 5,935 crore in the June quarter. Ebitda margins slipped 80 basis points to 7.4% in Q1 versus 8.2% reported a year ago, impacted mainly by investments in hyper-local commerce, Dinesh Taluja, CFO, Reliance Retail said during the earnings call. Reliance Retail’s tax expenses in the June quarter declined 7.3% versus last year, touching Rs 930 crore. Last year, tax expenses stood at Rs 1,003 crore during the same period. Depreciation, however, surged 17.5% y-o-y to Rs 1,780 crore in Q1 amid increased investment in digital and retail infrastructure.
Mukesh Ambani, chairman and managing director, Reliance Industries, said, “Reliance Retail delivered resilient growth this quarter. Our omni-channel presence continues to serve millions of Indian consumers and I am confident that it is well placed to benefit from India’s long-term consumption growth.”
The FMCG business under Reliance Consumer grew 2.1 times versus last year in Q1, touching Rs 8,600 crore, led by brands such as Campa (beverages) and Independence (staples). Daily essentials led by Independence delivered sales of Rs 3,200 crore in Q1. Beverages led by Campa delivered sales of Rs 2,900 crore in the June quarter, Ketan Mody, chief operating officer of Reliance Consumer, said during the post-earnings investor call. The company also achieved over 50% of FY26 sales in Q1, with double-digit market share in key markets, he added.
Mody also said that the FMCG business continued to scale up distribution, reaching over 5,000 distributors and over three million retail outlets in the quarter under review. External channels contributed over 80% of total sales in Q1 as the company expanded distribution. Reliance Consumer has also taken its international presence to over 40 markets. It has scaled up manufacturing capabilities to service demand, Mody added.
Hyper-Local Expansions
Reliance Retail, meanwhile, continued to focus on new store openings, adding 252 new outlets in the June quarter, taking the total store count to 20,169 with a total area of 78.4 million sq. ft. JioMart, which is driving digital commerce, serviced 5,500 pin codes in Q1, with over 2,500 digital and fashion & lifestyle stores connected to two-hour delivery.
Reliance Retail’s registered customer base stood at 396 million, a growth of 10.6% y-o-y in Q1. Grocery digital commerce continued to scale up, with average daily orders up 116% in the June quarter versus last year. The business witnessed 8.5% y-o-y growth in unique customers, while total transactions recorded stood at 568 million, up 46% y-o-y in the said quarter, reflecting growing customer engagement, the company said. The digital channel share contributed 13.4% of grocery B2C revenue, up 160 basis points versus last year.
In Q1, JioMart’s active seller base grew 26% y-o-y, strengthening marketplace depth and breadth, Taluja added.
Isha Ambani, executive director, Reliance Retail Ventures, the holding company of Reliance Retail, said the company’s continued investment in digital commerce undescored the power of online platforms. “Our expanding customer base, widest store network and omni-channel capabilities position us well to continue fulfilling every need,” she said.