Reliance Industries Ltd’s retail unit Reliance Retail reported a consolidated net profit of Rs 431 crore for the fiscal first quarter April-June.
Reliance Industries Ltd’s retail unit Reliance Retail reported a consolidated net profit of Rs 431 crore for the fiscal first quarter April-June, which the company said was despite complete lockdown for a long period of time and only essential services being operational. Reliance Retail EBITDA fell by almost half as compared to the same quarter a year ago. RIL’s retail group posted an EBITDA of Rs 1,083 crore as opposed to Rs 2,060 crore in the April-June quarter last year. Amid coronavirus pandemic, Reliance Retail pushed grocery business heavily and also launched JioMart. “The quarter saw 21% growth year on year across the operational businesses of Grocery and Connectivity,” the company said in the statement. Other than JioMart, RIL also scaled up its lifestyle and e-commerce channel AJIO.
While Reliance Retail’s grocery business flourished with a rising demand for everyday essentials, its consumer electronics and fashion and lifestyle businesses were affected severely amid the nationwide lockdown. Stores remained closed for the most of the quarter, impacting retail business in these two categories especially. RIL opened 69 new stores during the quarter while over 250 stores were under development before lockdown was imposed.
Work from home effect
As many companies imposed work from home for their employees, the company saw a surge in the sales of laptops, gadgets, dishwashers etc. Even then the footfall remained downbeat as compared to pre-covid levels.
Reliance Industries Ltd’s retail arm is one of the biggest retail companies in India. Mukesh Ambani looks to build a retail empire after a downturn in the fortunes of the petrochemicals and energy businesses. Reliance Retail is especially expected to benefit from RIL’s recent deal with Facebook under which both these giants look to leverage India’s burgeoning internet users market. Reliance Retail also looks to shake up the empires of Amazon, Flipkart and Snapdeal under its new commerce venture and the company has already launched JioMart to expand its retail reach. The company currently has about 11,806 retail stores across the country.