Reliance Retail Ventures on Friday reported a 24.5% year-on-year decline in net profit to ₹2,619 crore for the quarter ended September, even as revenue from operations rose 5.8% to ₹80,220 crore. Its fast-moving consumer goods business, run under Reliance Consumer Products, saw gross revenue surge 1.6 times on year to ₹8,266 crore.
India's largest retailer attributed the hit on profitability for a third straight quarter to planned investments in quick commerce such as dark stores, along with absorbing input cost rise to shield demand and a shift in the festive season compared to last year. It said in the earnings call that the share of ecommerce to total grocery and fashion sales have gone up, and expect to drive value from ecommerce in FY28 and FY29.
The company cited the festive season shift for the muted revenue growth as well. Despite that, the business achieved a 7% year-on-year (YoY) growth in transactions during the quarter, it noted.
Gross revenue rose 6.4% year on year to ₹91,716 crore after adjusting for the demerger of the consumer brands business in December last year. Earnings before interest, taxes, depreciation and amortisation (Ebitda), before one-time impairment charge of ₹108 crore from closure of 7-Eleven stores, was at ₹6,228 crore was down 8.6% YoY, while Ebitda margin stood at 7.8%.
The company said finance costs went up 53.9% YoY at ₹905 crore due to higher borrowing and interest rates. Reliance Retail Ventures executive director Isha M Ambani said the company is building a future-ready retail business by combining an extensive physical network with digital convenience, technology and a deep understanding of Indian consumers. "The new model with fast growing digital commerce and B2B channels is working and funded by the profits of offline business," she said.
Reliance Retail opened 303 stores during last quarter with a net reduction of 222 stores sequentially over the first quarter due to closure of unproductive stores. The company's total store count was at 19,947 as of September.
Mukesh D Ambani, chairman and MD of Reliance Industries, said in a media statement the retail business posted sustained growth across all formats and channels. "Consumer demand stayed healthy, supported by our extensive physical and digital presence and our continued focus on serving the diverse needs of Indian consumers," he said.
