Reliance Retail Q3 revenue declines 9.7% to Rs 33,018 crore; profit surges

The company said that all stores were operational during the quarter, with the company adding 327 new stores in Q3
Reliance Retail, the retail arm of Reliance Industries (RIL), reported a 9.7 per cent sequential decline in its revenue from operations which stood at Rs 33,018 crore in the December quarter (Q3), but profit surged on the back of strong operational performance, it said on Friday.


Yearly numbers are not comparable, RIL said, since the petro retail business, which makes up 40 per cent of the company’s retail revenues, has been demerged.


Gross sales decreased 8 per cent sequentially to Rs 37,845 crore in Q3.


Earnings before interest, tax, depreciation, and amortisation (Ebitda) rose 53.9 per cent sequentially in Q3 to touch Rs 3,087 crore, while Ebitda margins expanded 380 basis points to 9.3 per cent. RIL does not report net profit numbers for its retail business.


The firm said all stores were operational during the quarter, with the company adding 327 new stores in Q3. Total store count now stands at 12,201 outlets spread over 31.2 million sq ft.


Analysts expect the retail business to pick up as the economy recovers. The company is also beginning to consolidate backend operations of the Future business into it.


On Wednesday, markets regulator Sebi had cleared the Future-Reliance deal, even as the Singapore arbitration proceedings between Amazon and the Future group over the deal continues.


Grocery helped the retail arm during the quarter, followed by consumer electronics, though fashion and lifestyle businesses saw a strong rebound during the quarter.


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.


Mukesh 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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