Reliance Retail surprises with a sharp growth of 27% despite slowdown
- The retail unit of
Reliance Industriesposted a strong show in second quarter earnings. Reliance Retailsaw its pre-tax profits grow by 66.8% to ₹2,322 crores.
- The share price of Reliance Industries has jumped over 12% in the last one month compared to the 4% rally in Sensex.
The revenue from Reliance Retail grew to ₹41,202 crores as opposed to ₹32,436 crores in the same quarter last year.
During the quarter, Reliance Retail added 337 stores taking the total store count to 10,901 stores.
It is present across areas like food and grocery, consumer electronics, fashion and lifestyle.
Poised for growth
Research firm Bank of America-Merrill Lynch (BofA-ML), in its latest report, predicts that Reliance Retail will be a big driver in taking RIL’s market value to a massive $200 billion in two years. A big chunk of the value created will come from serving the kirana stores.
Reliance Retail, which was launched in 2006, has been growing rapidly over the years and has been aggressively acquiring companies as well. Earlier this year, Reliance Retail had acquired the iconic British toy making company Hamley’s and in July completed the 100% acquisition of the company for a reported amount of ₹620 crore.
The share price of Reliance Industries had already run up over 12% in the last one month and investors have priced a strong show from the company that was once an energy giant, and is now fast changing into a consumer business with its thrust on Reliance Retail and on telecom via Reliance Jio.
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