Reliance Retail sees Q1 net profit more than double year-on-year


Retail, India‘s biggest organised-sector retailer, saw its net profit more than double year-on-year to Rs 962 crore in the June quarter, although mobility and business curbs through the period under review caused sequential profit moderation in the vertical. In the year-ago period, profit was at Rs 431 crore.

Revenue was up 22% on-year to Rs 38,547 crore, even though it reported a sequential shrinkage. Reliance Retail said its operations were significantly marred by the devastating Covid-19 wave that prompted lockdowns in most parts of India.

“The second fortnight of April and May were particularly challenging with operations being ceased across most of the network,” Dinesh Thapar, chief financial officer, Reliance Retail, said in an investor call. “Business for most of the quarter was largely confined to essentials.”

Reliance Retail said about a quarter of its 13,000-plus stores were fully operational during these months and another 35% were partially open as various states imposed curbs on the number of hours the outlets would run. “So, about 60% of the network was open in some form,” Thapar said.

In April, almost 70% of Reliance Retail’s outlets were functional from the standpoint of operating hours, and that metric dived to just 25% in May as more restrictions were imposed, Thapar said. “It started to get better in June as there has been progressive easing across the states,” he said. Footfalls in the quarter dropped to 46%, significantly lower than 90% in the Jan-March quarter.

“Consumer sentiment was significantly affected,” said Thapar.

Reliance Retail said its grocery business was “very resilient” in the quarter, while fashion and lifestyle and electronics showed “stepped up” performances.

Digital commerce has been a key growth area for Reliance Retail, contributing about a quarter to the sales in the first quarter, compared with 5% last year.

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