New Delhi: Reliance Retail on Friday reported over two-fold increase in pre-tax profit at Rs 3,897 crore for June 2022 quarter, as footfalls at its stores surpassed the pre-Covid levels.
The retail arm of Reliance Industries Ltd (RIL) said it had posted a pre-tax profit or EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of Rs 1,390 crore in the April-June quarter of FY21. Its revenue from operations of the organised retail segment was up 53.67 per cent to Rs 51,582 crore in the latest June quarter, from Rs 33,566 crore in the year-ago period.
Gross revenue, which includes the value of sales and services, was up 51.90 per cent to Rs 58,554 crore in the three months ended June 2022. It stood at Rs 38,547 crore in the corresponding quarter.
"Reliance Retail delivered a strong performance with its best-ever quarterly revenues in a macro environment that remained challenging," said RIL in its earnings statement.
The retail business witnessed its first quarter without any operating disruptions since the onset of Covid, said RIL.
"Consumer spending got a boost as families indulged in leisure activities, socialising, festivities and shopping as Covid situation improved, though sentiments remained cautious due to inflationary concerns," it said.
The business posted an operating EBITDA of Rs 3,897 crore (USD 493 million), up 180.35 per cent year-on-year with a 350-bps (basis points) improvement in margin at 7.6 per cent, compared to 4.1 per cent in the corresponding quarter of the previous year, said RIL.
"This was led by higher contribution from fashion & lifestyle and consumer electronics and growing operating leverage with strong LFL growth over last year across consumption baskets," it said.
The "net profit for the quarter was Rs 2,061 crore", higher by 114.2 per cent, while "cash profit for the quarter was Rs 2,873 crore", higher by 105.2 per cent year-on-year, said RIL.
Its digital and new commerce segment grew over two-fold from last year and contributed about 19 per cent of gross revenue, said RIL.
RIL Chairman and Managing Director Mukesh D Ambani said: "In the retail business, we continue to focus on enhancing our consumer touch-points and building a stronger value proposition for our customers. Our strong supply chain infrastructure and sourcing efficiency is helping us maintain competitive pricing for daily essentials, thereby insulating consumers from inflationary pressures."
Its fashion & lifestyle revenue grew over three times driven by regional festivities and promotions resulting in "all-time high average bill values", while revenue from consumer electronics doubled, said RIL.
In consumer electronics, Reliance Retail has a broad-based "growth across the categories with phones, ACs and high-end TV up 2X", said Reliance Retail Head - Strategy and Business Development Gaurav Jain in earnings calls.
Reliance Retail's grocery business had a "buoyant quarter" as it recorded its highest-ever revenues and doubled its business over last year led by broad-based growth across all categories.
Pharma business also nearly doubled over last year on the back of stronger store performance as well as digital commerce platform.
In the April-June quarter, Reliance Retail added 792 stores in the country, expanding its presence across geographies.
"With 792 store openings in the quarter, the spread of 15,866 stores with an area of 45.5 million square feet covers all corners of the country," it said.
In the April-June quarter, Reliance Retail has added over 17,000 jobs and its total employee count stands at 3.79 lakh. During the April-June quarter, footfalls at Reliance Retail stores recorded 175 million, which was 19 per cent above pre-Covid levels as consumers returned to stores.
As on June 30, 2022, Reliance Retail was operating on 45.5 million square feet, which was 31.88 per cent higher than the corresponding quarter. It was operating 34.5 million square feet in the April-June quarter of FY22.
Its digital commerce platforms continue to grow even as stores return to normal operations, and its daily orders were up 64 per cent year-on-year.