Reliance Retail’s Q1 PAT Declines 14% YoY to Rs 2,806 Crore Amidst Quick-Commerce Spending, Despite 7% Revenue Growth.
Reliance Retail’s performance in the June quarter showcases a nuanced landscape marked by both growth and challenges. The company’s revenue increased by 7.4% year-on-year to reach Rs 90,408 crore, yet profit after tax decreased by 14.2% to Rs 2,806 crore. This decline can be attributed to heightened expenditures and cash burn associated with its fast-expanding quick commerce segment. Furthermore, the company’s EBITDA margin saw a contraction of 80 basis points to 7.9%, driven largely by growing digital commerce contributions and the requisite investments in infrastructure, which elevate fixed costs.
Adjusted for the demerger of the Consumer Brands business, Reliance Retail reported an even more robust gross revenue growth of 11.6% year-on-year, with double-digit growth across critical categories such as grocery, fashion, lifestyle, and consumer electronics. Notably, average daily orders for grocery digital commerce surged by an impressive 116% year-over-year. The company continues to expand its physical footprint, having opened 252 new stores, bringing the total store count to 20,169 and total area to 78.4 million square feet. This expansion supports Reliance’s goal of increasing market penetration and enhancing omni-channel capabilities.
JioMart’s performance is notably strong, demonstrating substantial growth with a 116% year-over-year increase in average daily orders. The digital channel’s contribution to Grocery B2C revenue now stands at 13.4%, reflecting a 160 basis point improvement year-on-year. The company has reported a 26% year-over-year growth in its active seller base, highlighting its marketplace depth and the expanding reach of its services across 5,500 pin codes. Reliance Management is focused on optimizing customer repeat rates, order density, and delivery efficiency, which are critical for enhancing profitability moving forward.
Looking ahead, Reliance Retail has set ambitious targets for the next three years, aiming to double its operating EBITDA through strategic growth and enhanced economics. The focus will be on scaling online operations and JioMart’s market presence while also expanding dark store capabilities and optimizing unit economics. These strategic initiatives are expected to bolster revenue, margins, and cash generation, laying a strong foundation for fiscal years 2028 and 2029 as the company intensifies efforts to enhance customer lifetime value and explore new monetization avenues.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)