Reliance Retail’s consolidated Q2 results are down by 4.5 per cent on a year-on-year basis at ₹39,199 crore from ₹41,223 crore same time last year. Despite this, it is the retail segment that has driven the second-highest revenues for the Mukesh Ambani-owned Reliance Industries Limited.

For the quarter that ended on September 30, the Retail arm of RIL has managed to widen the difference between the petrochemical arm of the company. The revenue from the petrochemical segment stood at ₹29,665 crore versus ₹39,199 crore for the retail segment.

The Retail segment includes consumer retail and a range of related services. During the virtual press conference, Srikanth Venkatachari, CFO of RIL said that 85 per cent of the stores are now operational in comparison to pre-covid times. “We have managed to operate 35 per cent more stores than the previous quarter. It is also seeing higher footfalls than earlier.”

He further said: “We added 232 stores this quarter. Our revenues for the quarter are higher by 30 per cent from the previous quarter and the revenue on a year on year basis is flat, which is a good sign. The activity in the retail segment will reach the pre-covid level by the Q3 of FY21.”

During the quarter, Reliance Retail Ventures Limited raised funds to the extent of ₹7,500 crore by issuing Equity shares to SLP Rainbow Holding Pte. Ltd. (Silver Lake). “The fundraisers will be able to achieve our goals quicker.”

In its press note, Reliance Retail also announced that it has entered into an agreement to acquire retail & wholesale business, and the logistics & warehousing business of the Future Group for a consideration of   Rs 24,713 crore​. This acquisition is subject to SEBI, CCI, NCLT, shareholders, creditors and other requisite approvals.

JioMart and others

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “We delivered strong overall operational and financial performance compared to the previous quarter with recovery in petrochemicals and retail segment and sustained growth in Digital Services business."

"Domestic demand has sharply recovered across our O2C business and is now near pre-Covid level for most products. Retail business activity has normalized with strong growth in key consumption baskets as lockdowns ease across the country. With large capital raise in the last six months across Jio and Retail business, we have welcomed several strategic and financial investors into the Reliance family,” he added.

The growth of the grocery and the connectivity segments drove the revenues for Reliance Retail segment. “Though the supply chain was an issue for the quarter, this impacted a lot of merchandising in the fashion and lifestyle segment. Business growth was led by staples, but personal care and processed food are growing very well,” Dinesh Thapar - Group Chief Financial Officer - Reliance Retail said.

On JioMart, the kirana partnerships have grown from 6 to 20 cities and orders are up by 4x. On JioMart, in future Thapar explained that Reliance Retail planned “to scale up digital commerce, with the launch of electronics, fashion, and lifestyle, pharma, on JioMart.” 

Digital commerce continues to grow customers and the scale has been led by JioMart, AJIO and RelianceDigital. The result of cutting on fixed costs, rentals, and discretionary expenses that we started in March itself has helped us with the revenue.

Reliance Retail’s fashion segment, AJIO has scaled up and has had an expositional growth. It has reached 4x to the pre-Covid times. The quarterly run rate is the last full year. 

“Though operations in malls have been severely hit, we have focused on record conversations and high bill value from whatever stores are open, which has given us a way higher bill value than earlier. Small town stores are doing very well in comparison to the previous segment,” Thapar explained.

The supply chain expansion has been put on hold at the moment and will expand as the Covid situation eases out.

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