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Reliance Retail Q3 result | Net profit jumps 23% to Rs 2,259 crore backed by festive sales

The retail arm of Reliance Industries registered a 53 percent year-on-year jump in consolidated revenue from operations to Rs 50,654 crore in Q3FY22 as compared to Rs 33,018 crore reported last year.

January 21, 2022 / 10:48 PM IST
(Image: Shutterstock)

(Image: Shutterstock)

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Reliance Retail, the retail arm of oil-to-telecom conglomerate Reliance Industries, reported a strong performance and beat street expectations in the third quarter (Q3) of the financial year 2022 as consumer demand rebounded led by festive period and the easing of movement curbs across the country.

The company reported a 23 percent year-on-year (YoY) jump in its consolidated net profit at Rs 2,259 crore for the quarter ended December as compared to Rs 1,830 crore in the corresponding period last year. Its revenue from operations (consolidated) climbed over 53 percent YoY to Rs 50,654 crore in Q3 FY22 as compared to Rs 33,018 crore reported last year.

A CNBC-TV18 poll of analysts had projected Reliance Retail to report a revenue of Rs 45,450 crore for Q3.

“Both our consumer businesses, retail and digital services have recorded highest ever revenues and EBITDA. During this quarter, we continued to focus on strategic investments and partnerships across our businesses to drive future growth. Retail business activity has normalised with strong growth in key consumption baskets on the back of festive season and as lockdowns eased across the country,” Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries, said in a statement.

Reliance Retail’s EBITDA from operations during the quarter stood at Rs 3,522 crore, 52 percent higher than Rs 2,312 crore reported in the year-ago period. Reliance Retail’s EBITDA margin in Q3 stood flat at 7 percent.


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Operational environment improves

Though the company witnessed sporadic disruption in December due to the COVID-19 third wave, overall footfalls during Q3 across segments of fashion, jewellery, grocery remained strong helping the company deliver a strong performance, said the company’s management during a virtual post-earnings call on January 21.

“The operating environment has been improving as the restrictions were eased through the quarter progressively. There was a build-up during the festive period and as normalcy returned, our footfalls reached almost pre-Covid levels at 95-97 percent,” said Gaurav Jain, head – strategy and business development, Reliance Retail. The footfalls in stores are up 30 percent as compared to the same period last year.

The company witnessed a festive mood in the market starting from Navratri in October till the wedding season in December. “Towards the end of December, there were sporadic disruptions because of the new Covid strain, but we were prepared and optimistic and were able to tackle the emerging challenges,” added Jain.

The company’s management said a better operating environment backed by its omnichannel capabilities helped it deliver its highest-ever revenue.

Reliance Retail opened 837 new stores across its retail brand in the December quarter taking its total store count to 14,412. The company now has 40.0 million square feet area of operation as compared to 31.2 million square feet in the corresponding quarter of the previous year. It also added 73 new warehousing and fulfilment centres with an area of 2.3 million square feet during the quarter.

Growth across categories

Reliance Retail reported strong sales across its products segments of grocery, consumer electronics, fashion and lifestyle, pharma etc.

“The revenue built up also has come from all our consumption baskets. The consumer electronics, as well as apparel and footwear have doubled their business led by customer buying, while grocery has maintained its consistent runway and also posted double-digit growth,” said Jain.

The company witnessed consistent double-digit growth in consumer electric stores as customers flocked back to the physical outlets. “Our average conversion value also jumped helping us clock some of our best sales during the festive season leading up to the wedding season,” he added.

Its digital platforms, too, surged led by festive demand. Ajio, the company’s management said, has added over 50 leading international and national brands to its platform and witnessed two-times growth in its monthly active users.

Reliance Retail’s digital-first lingerie brand Zivame posted its highest-ever quarterly sales in Q3 and crossed 100 store milestone in its offline expansion journey.

The way ahead

Going forward, the company’s management said that while the market is volatile due to the omicron variant, Reliance Retail is well-prepared to navigate its way through the challenges.

“And as the situation normalises our focus will remain on accelerating the growth momentum and also the expansion,” said Jain.

Reliance Retail will also continue to scale its digital commerce businesses across platforms and onboard new merchants across geographies.

“We will look at integrating all the acquisitions and also scale up these new businesses to the next level by providing them the right ecosystem support from Reliance Retail infrastructure and also continue to strengthen and sharpen our supply chain capabilities, product design and ecosystem in line with the business expansion,” he added.

Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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Devika Singh
first published: Jan 21, 2022 08:50 pm
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