Reliance Retail Q2 profit takes a hit on Qcomm push
Reliance Retail Ventures reported a significant drop in net profit, down 24.5% year-on-year to ₹2,619 crore in the last quarter. Despite this, revenue improved by 5.8% to ₹80,220 crore, largely driven by a surge in grocery sales. The company's profitability was affected by strategic investments and evolving festive season patterns, alongside rising finance costs stemming from increased borrowing…
Reliance Retail's net profit saw a 24.5% year-on-year decline to ₹2,619 crore in the second quarter of 2023, despite a 5.8% increase in revenue from operations to ₹80,220 crore. The fast-moving consumer goods arm, under Reliance Consumer Products, experienced a significant surge in gross revenue, doubling to ₹8,266 crore. The company's Qomm push into quick commerce, including dark stores, along with rising input costs and a shift in the festive season, led to the profit drop.
E-commerce's share of grocery and fashion sales has increased, and the company expects to capitalize on this growth in the upcoming fiscal years. Despite a muted revenue growth, the business saw a 7% year-on-year increase in transactions. Gross revenue rose 6.4% year on year to ₹91,716 crore, while Ebitda, excluding one-time charges, stood at ₹6,228 crore, down 8.6% YoY.
Finance costs surged 53.9% YoY at ₹905 crore due to higher borrowing and interest rates. Reliance Retail Ventures' executive director, Isha M Ambani, stated that the company is building a future-ready retail business by merging a vast physical network with digital convenience, technology, and deep consumer insights. As of September, Reliance Retail had opened 303 stores, reducing its total store count sequentially by 222 stores over the first quarter.
Chairman and MD of Reliance Industries, Mukesh D Ambani, confirmed sustained growth across all retail formats and channels, attributing consumer demand to the company's extensive physical and digital presence.
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