Reliance Retail Q4 Results: Profit Falls 4.3% Even As Business Rebounds

Reliance Retail Ventures Ltd.'s fourth-quarter profit fell and margin narrowed even as its business recovered from an Omicron-induced slowdown.

Net profit of India's biggest retailer, controlled by billionaire Mukesh Ambani, declined 4.3% over a year earlier to Rs 2,139 crore, according to its exchange filing.

Other Highlights (YoY)

• Gross revenue rose 23.3% to Rs 58,017 crore, led by fashion & lifestyle and consumer electronics.

• Revenue from operations (net of GST) rose 23.1% to Rs 50,834 crore.

• Ebitda rose 2.4% to Rs 3,705 crore. Sequentially, it fell 3%.

• Margin narrowed to 7.1% from 7.5%.

• Investment income stood at Rs 121 crore against Rs 534 crore.

• EBIT fell 5% sequentially but was flat over a year earlier at Rs 3,087 crore.

Footfalls surpassed pre-Covid levels in March, said Gaurav Jain, strategy and business development at Reliance Retail, in a post-earnings call. “Consumer sentiments increased gradually leading to increase in discretionary spends.”

Jain said resilient performance from small towns drove recovery, defying the general slowdown in consumption. Reliance Retail delivered its highest-ever quarterly revenues, even surpassing the festive quarter, despite the spread of Omicron.

“The headwinds posed by the Covid-led restrictions in January were offset by the robust growth in February and March as the business leveraged festive events and early setting of summer season, '' said Jain.

In January-March, the company added 798 stores to take the total count to 15,196—the highest in India. The pace of store addition, however, was the slowest in three quarters.

Digital and new commerce now contributes 19% to sales. “The business more than doubled its daily orders year-on-year across all its digital commerce platforms on the back of stronger product portfolio and attractive offers,” the company said in a statement.

Its fashion portal Ajio continues to grow with the addition of new brands and growing share of small cities, with nearly two-thirds of the orders placed from tier 3 or smaller towns, it said.

The business, the company said, expanded its merchant partner base in over 3,500 towns with over 3.5-times year-on-year growth in revenue.