Retail Therapy: Reliance bets big on retail arms
CNBC-TV18's Sajeet Manghat and Ashmit Kumar find that Reliance is betting bigger on retail in the future.
In the last fiscal year, Reliance Industries invested more money in its retail business than the cumulative investments of the organised retail industry. On some digging, CNBC-TV18’s Sajeet Manghat and Ashmit Kumar find that Reliance is betting bigger on retail in the future.
Reliance’s retail business revenues grew at 25% in financial year 2012, taking total revenue to Rs 6848.9 crore compared to Rs 5474 crore in the year ago period. This growth has Reliance betting bigger on retail. Last year, it infused Rs 2580 crore through cumulative optionally convertible preference shares in its retail business; that's more than the combined investment of other organised retail players.The company managed to trim losses marginally to Rs 395.5 crore from Rs 405 crore a year earlier, but Reliance Retail is not profitable yet. The year also saw Reliance restructure its retail holdings. Reliance retail's revenue dropped substantially - from Rs 592 crore to Rs 94 crore - indicating that it transferred its business to its subsidiaries.Among its key subsidiaries, Reliance Fresh recorded a 54% jump in sales to Rs 3,860 crore while losses rose by 71% to Rs 274 crore. Reliance Dairy sales grew 21% to Rs 423 crore while its electronics arm Reliance Digital recorded sales growth of 81% to Rs 1,234 crore. Reliance Trends, its apparel arm, recorded revenue growth of 48% to Rs 489 crore. Among the retail formats that Reliance operates on, gems and jewellery business posted a profit of Rs 84 lakh on sales that grew nearly 3.4 times to Rs 475 crore. Reliance also focused on warehousing and logistics infrastructure to support delivery to its over 1300 stores nationwide. It is further investing to develop its back-end end operations that helped the company add 200 stores last fiscal. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
