Footfall recovery, festive demand boost Reliance Retail's Q3 biz to record levels

The country's largest retail player Reliance Retail Ltd. (RRL) on Friday reported a record Rs 50,654 crore quarterly revenue from operations. Its operating revenue during the October-December period jumped 53 per cent year-on-year and 27 per cent sequentially as recovery in footfall at retail destinations, backed by a strong demand for online deliveries, boosted its business. It had posted Rs 33,018 crore and Rs 39,926 crore operating revenue in the same quarter last year and in the previous quarter, respectively.

The Mumbai-headquartered company's earnings before interest, tax, depreciation and amortisation (EBITDA) stood at an unprecedented Rs 3,522 crore - up 52 per cent from Rs 2,312 crore it had reported in the corresponding quarter last year. After taking a hit in the last quarter, its EBITDA margin improved by 90 basis points to 7 per cent from 6.1 per cent in the previous quarter. While in the December 2020 quarter its EBITDA margin was at 7 per cent, during the first nine months of FY2022 it dipped to 5.9 per cent as COVID induced disruptions impacted store operations during the first half of the fiscal.

While its net profit grew 23 per cent y-o-y and 33 per cent sequentially to Rs 2,259 crore - up from Rs 1,830 crore and Rs 1,695 crore, respectively. Sharp recovery in footfalls to near pre-COVID levels lifted RRL's business. During the quarter, footfalls at its physical outlets remained at 95 per cent of the pre-COVID days, which is also 30 per cent higher than the previous quarter.

"Retail business activity has normalised with strong growth in key consumption baskets on the back of festive season and as lockdowns eased across the country", said Mukesh Ambani, chairman, Reliance Industries, adding that the retail business has "recorded highest ever revenues and EBITDA" during the quarter. 

According to Gaurav Jain, head of strategy and business development at RRL, the firm's performance was boosted from all time high revenues recorded in all key business segments driven by "highest ever store sales and sustained growth momentum in digital & new commerce initiatives". While orders through its digital commerce business tripled over last year, merchant partnerships grew by 400 per cent.

"During the quarter we launched 813 new stores taking the total store count to 14,412. Further, we have added 73 warehousing and fulfilment centres with an area of 2.3 million square-feet. This takes our total area under operation to 40 million sq-ft (up from 33.8 million sq-ft at the end of FY2021)", Jain said in a post-earnings briefing.

Aided by productivity segments like smartphones, notebooks and tablets, its consumer electronics business followed by demand recovery in apparels and footwear, helped its finances. According to Jain, backed by strong performance of its flagship digital commerce entity Ajio and Jio Mart, the company has registered "best ever Diwali sales" during in 2021.

Also read: RIL Q3 results: Net profit rises 41.5% to Rs 18,549 cr

Also read: Jio posts 10% rise in net profit at Rs 3,615 cr in Dec quarter; ARPU grows 5.6%