Grocery and Fashion & Lifestyle’s strong growth momentum; Consumer Electronics’ steady performance
FinTech BizNews Service
Mumbai, 28 October, 2023: Reliance Retail delivered a strong Q2, FY24 performance. Its net profit rose 21% and revenue 18.8%.
Quarterly Performance (2Q FY24 vs 2Q FY23)
• Reliance Retail’s gross revenue recorded at Rs77,148 crore for 2Q FY24, a growth of 18.8% Y-o-Y led by well-rounded growth across consumption baskets.
Grocery and Fashion & Lifestyle businesses maintained strong growth momentum while Consumer Electronics had a steady performance despite festive period falling in 3Q FY24.
• Business posted an EBITDA of Rs 5,820 crore which was up by 32.2% on a Y-o-Y basis. EBITDA before Investment Income was recorded at Rs 5,607 crore.
• EBITDA margin from operations on net sales was at 8.1%, up 70 bps Y-o-Y driven by operating leverage and continued focus on cost management.
• Depreciation increased on account of higher asset base due to addition of new stores and supply chain infrastructure.
• Higher finance cost on account of increase in interest rate and borrowings for business expansion.
Operational Update
• The business expanded its store network with 471 new store openings taking the total store count at the end of the quarter to 18,650 stores with an area of 71.5 million sq ft.
• The quarter recorded footfalls of over 260 million across formats, a growth of 40.5% Y-o-Y.
• Digital Commerce and New Commerce businesses continued to grow and contributed 19% of revenue.
•The business acquired Ed-a-Mamma, a kids and maternity-wear brand and majority ownership of Superdry IP for India, Sri Lanka and Bangladesh.
•Global marquee investors reaffirm their confidence in Reliance Retail’s vision, execution prowess and value creation. The business completed equity fund raise of Rs 15,314 crore in the current round from global marquee investors.
• Reliance Retail completed transfer of assets to warehouse InvIT entity for a total consideration of Rs 5,150 crore on 25th October 2023. The asset value is reflected in Other Financial Assets as on 30th September 2023.
Consumer Electronics
• Consumer Electronics business maintained growth momentum with 11% growth over last year.
• The business successfully executed August 15th “Digital India Sale” with 23% Y-o-Y growth with exclusive ranges, new launches and attractive consumer offers.
• The business capitalized on regional festivals, new launches and promotions to drive AC, phones, refrigerators category growth.
• Own brands / PBG business further expanded its assortment by launching new products across QLED television, refrigerator and ACs. The merchant count grew by 2.6x Y-o-Y.
• New Commerce continued its growth journey and expanded its merchant partner base by 44% Y-o-Y. Phones and high-end television saw robust growth. Fashion & Lifestyle
• Fashion & Lifestyle business delivered 32% Y-o-Y growth. Offline business delivered robust growth despite festive season falling entirely in the next quarter. • Yousta: The business launched new store format “Yousta”, a youth focused fashion retail format, offering fast fashion at affordable prices. The format has received positive response and would be scaled up in the coming period.
• Trends, the flagship store format has launched a concept store with contemporary design and future ready, immersive shopping experience.
• Performax: The business is further strengthening its own brands portfolio through strategic partnerships - Performax partnered with All India Football Federation as an official kit sponsor while Point Cove partnered with Viacom18 for MTV kid’s collection.
• AJIO reported another strong quarter of growth. The catalogue expansion continued with range expanding by 50% Y-o-Y. The platform also successfully executed “AJIO All Star Sale” event and added 2 million new customers.
• Partner Brands continued to lead premium and luxury segment with widest portfolio of brands. Ajio Luxe delivered strong performance with option count going up by 61% Y-o-Y and a portfolio expanding to over 600 brands. Kids-wear portfolio has been further strengthened with acquisition of Ed-a-Mamma brand.
• Jewels business reported a sustained growth led by improvement in operational metrics in an environment where gold rates remained high. The business continued to strengthen product offerings with launch of ‘Varalakshmi’, a regional festive collection focused on South India market, Bella 6.0 and Aabhar national collections.
• Lingerie business’s flagship event ‘Grand Lingerie Festival’ delivered strong traffic across offline and online channels. The business strengthened product portfolio through new launches - thermals, athleisure, PJ sets.
• Urban Ladder’s ‘Freedom Sale’ campaign during Independence Day period delivered strong customer traction. The business forayed into B2B business through institutional sales.
Grocery
• Grocery delivered another quarter of record performance with 33% growth Y-o-Y led by Smart and Smart Bazaar formats. • The business successfully executed ‘Full Paisa Vasool Sale’ driven by uptick in general merchandise and home & personal care categories. Notably, the business achieved its highest single-day sale on 15th August.
• Strong shopping was witnessed during festivals of Raksha Bandhan, Onam, Janmashtami & Ganpati with gift packs and festive categories gaining good traction in addition to the wider portfolio of products.
• Business collaborated with over 125 leading brands in the country for ‘Smart Bazaar Chaliye’ campaign, an industry first initiative.
• The business is integrating Metro Cash & Carry’s operations with grocery New Commerce business to provide omni-channel experience and wider assortment to our B2B customers and merchant partners. Consumer Brands
• Consumer brands maintained its growth led by beverages, general merchandise and staples categories.
• The business is focusing on expanding distribution reach and engagement in General Trade channel, delivering 4x Y-o-Y revenue growth.
• Beverages continued to see strong performance with 7x revenue growth Y-o-Y. Campa has been receiving good traction from trade channels & consumers. ‘Campa Cricket’ has been launched to capitalise on the ICC World Cup event.
JioMart
• JioMart continued to be on a sustained growth path with robust increase in traffic and average bill value.
• JioMart’s "Grand Independence Sale” saw strong performance with robust growth in traffic and Gross Merchandise Value over last year.
• The business has undertaken strong marketing initiatives with onboarding of MS Dhoni as brand ambassador. To capitalise on the coming festive season, business has launched ‘JioUtsav – Celebrations of India’ event featuring great discounts and offers across categories.
•The focus on improving customer experience remains a top priority for JioMart. Grocery ingress with ‘Smart’ branding was launched for easier and faster grocery shopping experience. • The platform also strengthened its catalogue with option count growing 3x over last year and seller base expanding by 2x over last year.
Leadership Quote
Isha M. Ambani, Executive Director, Reliance Retail Ventures Limited, said "I am delighted to report that we have delivered yet another quarter of stellar performance and achieved an all-time high across financial metrics. The performance is a testament to our customer-centric approach that defines Reliance Retail and we look forward to serving our customers this festive season with renewed optimism and enthusiasm."
