Consumption slowdown? Reliance Retail posts a 62% jump in pre-tax profits
- Reliance’s consumer business saw a massive growth despite a
consumption slowdownin the country.
- In the last quarter, Reliance opened 456 stores while we also added 1 million sq ft of retail space.
- The total number of
Reliance Retailoutlets is now at over 11,300, up 14% in the last one year.
In the last quarter, Reliance Retail saw over 176 million customers walk into the stores with 117 million registered customers, growing at 42.6% over the same period last year, according to Chief Financial Officer (CFO) Alok Agarwal. This, at a time, when the Reserve Bank of India survey showed that consumer confidence is at its worst in six years.
You name ‘em, he’s got ‘em
Reliance Retail includes everything from large department stores to Reliance Digital, which sells electronics and gadgets, to apparel stores under the Reliance Trends banner to standalone outlets of Diesel, Hamleys, Bally Kenneth Cole, Thomas Pink, Brooks Brothers, Super Dry and Steve Madden in India.
The consumer businesses— Reliance Jio and Reliance Retail — now make for 37% of the conglomerate’s total EBITDA compared to less than 1% five years ago. “I am pleased with the progress of our consumer businesses which continue to establish new milestones every quarter,” Chairman
The secret of success
This has a lot to do with the fact that the company has been on a spree adding stores across the country. The total store count is up over 14% in the last one year, adding up to over 11,300 outlets now.
That has led to sharp rise in sales as well as profit. In the last three months, Ambani added 1 million square feet of store area. The retail segment also employs over 1,25,000 people.
The retail segment of Reliance industries saw its earnings before interest, tax, depreciation, and amortisation (EBITDA) grow over one and half times to ₹2,727 crore compared to the same period last year. “Retail is our hyper growth business. Our consumer business grew 12%, retail business delivered 15 consecutive quarters of revenue and EBITDA growth and 7 quarters of margin profit,” Agarwal added.
The ‘future’ of Reliance Brands
Reliance Brands, a subsidiary of the retail unit, increased its equity shareholding in Future101 by 2.5% for a consideration of ₹2 crore, taking its total stake in Future101 to 17.5%. Future 101 is the parent of luxury designer Raghavendra Rathore’s label, which Reliance Industries first bought a stake in 2018.
Reliance Jio and Reliance Retail boost earnings for Mukesh Ambani-owned RIL