Reliance does not report net profit figures for its retail business.
Earnings before interest and tax (Ebit) were down 25.35 per cent from a year ago to Rs 1,522 crore in Q2. It stood at Rs 2,039 crore last year. But the drop in revenue was marginal in Q2, declining 4.9 per cent year-on-year to Rs 39,199 crore. Revenue a year ago stood at Rs 41,223 crore.
The company said that 85 per cent of its stores were operational now. The company said footfalls improved in Q2, though it would go back to pre-Covid levels in the December quarter, which coincided with the festive season.
"The retail business has normalised with strong growth in key consumption baskets as lockdowns ease across the country. We welcome several strategic and financial investors into the Reliance family," Mukesh Ambani, chairman, RIL, said.
So far, Reliance Retail
has raised Rs 37,710 crore in eight rounds, offloading nearly 8.5 per cent stake in the past one month.
The company did not provide any updates on its retail divestment plans, saying it remained committed to growing the business.
Significantly, RIL chose not to comment about the Singapore arbitration proceedings between Amazon and the Future group over its nearly Rs 25,000-crore deal, signed in August. Amazon is looking to enforce the interim stay that it received on Sunday to hold the transaction between Future and Reliance, saying it violated the non-compete clause of a 2019 agreement it had with a Future promoter entity.
Apart from this, Reliance had positive news to report on the store addition front, setting up 232 new stores in Q2.
The company now has 11,931 stores, spread over 29.7 sq. ft of retail space.
Grocery helped the retail arm during the quarter, followed by consumer electronics, though fashion and lifestyle businesses remained weak during the quarter.
Around 21 per cent of Reliance Retail's revenue comes from food and grocery, 27 per cent from consumer electronics, and 8 per cent from fashion and lifestyle, sector analysts tracking the firm said. The balance is contributed by Jio sales points and fuel retail outlets.
In the past few years, Reliance Retail
has been pushing up its contribution from core retail, that is, food and grocery, consumer electronics and fashion and lifestyle, brokerage Edelweiss said in a report on the company.
Ambani's e-commerce bet, JioMart is expected to pitch in here, with the online platform clocking over 400,000 orders per day, since it went live in 200 cities in May. This is ahead of competitors such as BigBasket, Grofers, and Amazon Pantry.
A recent report by brokerage Goldman Sachs says that JioMart is poised to sell half of all online grocery in the next few years, led by significant investment by the company.
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