Reliance Retail’s Q3 net profit up 6.2% at ₹2,400 crore; finance costs, depreciation weigh

• Reliance Retail’s Q3 revenue from operations went up 18.6% aided by well-rounded growth across all baskets and channels.
  
• It reported a 255% growth in finance costs to ₹568 crore on account of higher loan balances and increase in interest rates.
  
• Digital and new commerce businesses contributed to 18% of the revenue in Q3.
• Festive offers during Diwali, Prathmasthami and Christmas gained traction with customers resulting in higher conversions and bill values, the company said.

Reliance Retail reported a 6% growth in its third-quarter net profit to ₹2,400 crore from ₹2,259 crore in the same quarter last year, weighed down by a massive increase in finance costs and depreciation.

“Finance costs increased on account of higher loan balances and increase in interest rates,” the company said in a press release on Friday. It reported a 255% growth in finance costs to ₹568 crore for the third quarter, as compared to ₹160 crore in the same quarter last year.

Depreciation too increased by 81% year-on-year on account of higher capitalisation of assets.

Its revenue from operations went up 18.6% to ₹60,096 crore from ₹50,654 crore in Q3FY22, aided by a well-rounded growth across all baskets and channels.

The retailer now has 17,225 stores and the area it operates increased by 50.5% to over 60 million square feet during the quarter.

“The business continued to invest in bolstering its infrastructure capabilities by expanding over 2.2 million Sq. ft. of warehouse space,” the company said.

Festive boost, highest-ever footfalls

The quarter recorded highest-ever footfalls at 201 million across formats and geographies. “Retail business had another quarter of strong progress with more Indians choosing to shop at Reliance Retail stores. We are focused on delivering superior products and value to customers while improving profitability,” said Mukesh Ambani, CMD of Reliance Industries.

The company’s latest ventures – digital and new commerce businesses grew by 38% y-o-y and contributed to 18% of the revenue.

Its grocery business grew 65%, and the consumer electronics segment, excluding devices, grew 45%. Its fashion and lifestyle business grew 13% y-o-y bolstered by festival and wedding season sales. “Festive offers during Diwali, Prathmasthami and Christmas gained traction with customers resulting in higher conversions and bill values. Winterwear was impacted due to delay in the onset of winter season,” the company said.

Reliance Retail said that its premium brands business grew 38% growth y-o-y led by higher footfalls and new store openings. It has also launched mono-brand websites for Tumi, Hunkemoller and Pottery Barn during the period.

The company claims that the acquisition of Sosyo, Lotus Chocolate and launch of the Independence brand will strengthen its portfolio. It also acquired V Retail (Centro Footwear). In Q3, JioMart also strengthened its catalogue by 71% and expanded seller base by 83% over the preceding quarter.

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