Reliance Retail sees robust growth amid productivity boosts, expanding offerings

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Reliance Retail is poised for strong growth in the upcoming quarters, driven by its ongoing productivity enhancements, as the company continues to streamline operations and expand its product offerings to capitalize on evolving consumer trends, chief financial officer Dinesh Taluja said on January 16 in a virtual post-earnings video briefing.

“We are focused on expanding distribution in priority states, strengthening our product portfolio, and building a robust supply chain. This will help us accelerate the growth of our FMCG business,” Taluja said. As of Q3, the company opened 779 new stores during the quarter, bringing the total number of stores to 19,102, covering an area under operation at 77.4 million sq.

The company, which entered the FMCG space in 2022 by acquiring the defunct Campa Cola brand, is now looking to tap into emerging sectors like beauty, skincare, and wellness to diversify its portfolio. The company expects margins to benefit from increased sales and improved operational efficiencies, especially in its growing FMCG and grocery segments.

Sales growth in the quarter was aided by festive and wedding sales and a new year campaign led by new product launches and attractive promotions, according to the company’s presentation. “Reliance Retail delivered a strong performance during the quarter, which was led by festive buying across consumption baskets. Our focus on offering a wide range of products at an attractive price-value proposition continues to draw customers to our stores and digital platforms,” said Isha Ambani, Executive Director, Reliance Retail Ventures Ltd.

The comments come as the retail arm of diversified conglomerate Reliance Industries reported a 10.1 percent jump in the third quarter net profit at Rs 3,458 crore, up from Rs 3,145 crore same period last year. Its gross revenue stood at Rs 90,333 crore, up 8.8 percent from Rs 83,063 crore in the corresponding quarter last year.

“Retail segment delivered a strong performance, with noteworthy contribution from all formats. The business ably capitalized on the pick-up in consumption amid festive demand during the quarter,” said Reliance Industries chairman Mukesh Ambani. During the quarter, the company benefitted from the festive and wedding demand purchases, with its stores witnessing a total footfall of 296 million across formats, a growth of 5 percent y-o-y, in the quarter ended December 31.

In the third quarter, the consolidated EBITDA from operations increased to Rs 6,632 crore from Rs 6,041  crore in the same quarter last year. Digital commerce and new commerce contributed 18 percent of total revenue, and the registered customer base grew to 338 million.

Strong growth at consumer brands 

The company is projecting a revenue of over Rs 1,000 crore for each of its fast-moving consumer goods (FMCG) brands, Campa and Independence, in FY25. The consumer brands unit reported revenue of Rs 8,000 crore in the first nine months of FY25, it said in the presentation.

“Campa & Independence brands continued to gain traction across markets; Campa has more than 10 percent market share in the sparkling beverage category in select states,” the company said.  Taluja flagged that the company is looking to invest in marketing and promotions to accelerate brand presence and increase product salience in the market.

Other segments

The company’s B2C brand AJIO saw its average bill value grow 7 per cent YoY and the fashion platform added 2 million customers in the quarter, Taloja said.  AJIO strengthened its portfolio through new brand launches like ON, Forever 21, Saucony, etc., the company added.

Meanwhile, grocery B2C business maintained its strong growth momentum with 37 percent growth Y-o-Y led by a big box format. “There was growth across categories, with general merchandise and value apparel growing at 20 percent Y-o-Y and premium personal care and beauty growing 16 percent Y-o-Y,” the company said.

The consumer electronics unit registered a 12 per cent growth on the back of the festive period sales, new product launches and attractive promotions.  Meanwhile, the company said the jewellery business volumes were impacted due to increased gold prices.

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