Reliance Retail Ventures reported a 24.5% fall in net profit for the quarter ended September, as spending on quick commerce and a shift in the festive season dented earnings. The company announced the results on Friday.
Net profit came in at ₹2,619 crore compared with the same quarter a year earlier. Revenue from operations still grew 5.8% to ₹80,220 crore.
Gross revenue rose 6.4% year on year to ₹91,716 crore. That figure adjusts for the demerger of the consumer brands business in December last year.
Profitability under pressure for a third quarter
India’s largest retailer said profitability has been hit for a third quarter in a row. It blamed planned investments in quick commerce, including dark stores, which are small warehouses used for rapid deliveries. It also said it absorbed higher input costs to protect demand, and that the timing of the festive season differed from last year.
The festive shift was also given as the reason for the muted revenue growth. Even so, transactions grew 7% year on year during the quarter, the company said.
On the earnings call, Reliance Retail said ecommerce now makes up a larger share of its total grocery and fashion sales. It expects to draw value from ecommerce in FY28 and FY29.
Ebitda and costs
Ebitda, or earnings before interest, taxes, depreciation and amortisation, was ₹6,228 crore before a one-time impairment charge of ₹108 crore. The charge came from closing 7-Eleven stores. The figure was down 8.6% from a year earlier, and the Ebitda margin was 7.8%.
Finance costs jumped 53.9% to ₹905 crore. The company put this down to higher borrowing and higher interest rates.
FMCG business grows sharply
One bright spot was the fast-moving consumer goods business, run through Reliance Consumer Products. Its gross revenue rose 1.6 times from a year earlier to ₹8,266 crore.
Store network trimmed
Reliance Retail opened 303 stores in the quarter. However, it closed unproductive outlets, leaving a net reduction of 222 stores compared with the first quarter. Its total store count stood at 19,947 as of September.
What the Ambanis said
Isha M Ambani, executive director of Reliance Retail Ventures, said the company is building a retail business ready for the future. She said it does this by combining a large physical network with digital convenience, technology and a deep understanding of Indian consumers.
She added that the new model, with fast-growing digital commerce and business-to-business channels, is working. According to her, the profits of the offline business are funding it.
Mukesh D Ambani, chairman and managing director of Reliance Industries, said in a media statement that the retail business posted steady growth across all formats and channels. He said consumer demand remained healthy, helped by the company’s wide physical and digital presence and its focus on the varied needs of Indian consumers.
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