Business

Reliance Retail shrugs off slowdown

Star peformer: Consumer electronics, connectivity accounted for a third of revenue growth.

Star peformer: Consumer electronics, connectivity accounted for a third of revenue growth.   | Photo Credit: K.V. Poornachandra Kumar

Tops FY19 Ebitda in 9 months this fiscal; electronics, fashion, grocery add heft

Reliance Retail became India’s largest and most profitable retailer amid a general slowdown in 2019, as it became the first in its segment to cross the ₹1-lakh crore mark over a nine-month period.

The company posted a 66% growth in its earnings before interest, tax, depreciation and amortisation (Ebitda) to ₹7,098 crore on a 33% growth in revenue to ₹1,24,725 crore for the nine months ended December, 2019.

December metrics

Reliance Retail reported Ebitda of ₹2,727 crore on revenue of ₹45,327 crore for the December quarter. In comparison, Avenue Supermarts Ltd, which owns and operates the D-Mart chain of stores, reported a profit of ₹394 crore on revenue of ₹6,752 crore for the December quarter.

In the first nine months of FY20, the retail arm of the conglomerate surpassed its full year FY19 profit numbers as consumer electronics, fashion & lifestyle and grocery delivered higher growth at 36% year-on-year.

“Strong and broad-based performance across consumer electronics, fashion & lifestyle and grocery led to double-digit growth and margin expansion across consumption baskets.

“Operating leverage and efficiencies contribute to sustained Ebitda margin improvement,” said Gaurav Jain, head of strategy and business development at Reliance Retail told The Hindu.

11,000 stores

The company crossed the 11,000-store milestone opening over 1,000 stores in the first nine months of this fiscal; new store openings contributed to balanced growth across segments, according to the company.

Consumer electronics and connectivity accounted for one-third of the growth in revenue while grocery contributed 19%,followed by fashion and lifestyle at 9% and petro retailing at 8%.

Investment Adviser S.P. Tulsian said, “Going by Ebitda growth, Reliance Retail will be another Reliance in the coming years. The retail arm alone will have market capitalisation of ₹10 lakh crore, which is enjoyed by Reliance today.”

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Printable version | Feb 19, 2020 4:18:05 AM | https://www.thehindu.com/business/reliance-retail-shrugs-off-slowdown/article30595863.ece

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