Reliance Retail Ventures, the retail arm of Reliance Industries Ltd (RIL), on Friday reported a 4.8 percent year-on-year (YoY) decline in net profit at Rs 2,139 crore for the fourth quarter ended March 31, 2022. The business also crossed a milestone of Rs 12,000 crore EBITDA in a year for the first time.

The business, which expanded from 33.8 million sq. feet to 41.6 million sq. feet, recorded gross revenue of Rs 58,017 crore, a growth of 23.3 percent YoY. The EBITDA, or earnings before interest, taxes, depreciation, and amortisation, was recorded at Rs 3,705 crore, up 2.4 percent YoY.

However, EBITDA before investment income grew 16.3 percent YoY to Rs 3,584 crore ($473 million), led by robust performance in fashion & lifestyle and grocery consumption baskets.

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The cash profit for the quarter was Rs 2,878 crore ($380 million), higher by 3.8 percent YoY. The business continued to bolster its store network and strengthen its supply chain capabilities. It opened 793 stores and added 3.1 million sq ft of warehousing and fulfilment space during the quarter.

The business more than doubled its daily orders year on year across all its digital commerce platforms on the back of a stronger product portfolio and attractive offers. Alongside new commerce, the business continued to partner with new merchants across geographies and consumption baskets. The merchant partner base grew 3x over last year.

EBITDA milestone

It recorded an all-time high EBITDA of Rs 12,381 crore ($ 1.6 billion) for FY22, a growth of 26.5 percent YoY driven by strong revenue performance across all consumption baskets. EBITDA before Investment Income was at Rs 10,932 crore, a growth of 29.3 percent YoY.

The business recorded gross revenue of Rs 199,704 crore ($ 26.3 billion) for the year FY22, a growth of 26.7 percent over last year driven by broad-based growth across all consumption baskets. "This despite COVID restrictions in place during the year with 87 percent of the stores operational and 81 percent footfalls recorded at stores as compared to pre-COVID levels," the firm said in a statement.

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At the operating level, EBITDA stood at Rs 3,712 crore in Q4 FY22 over Rs 3,835 crore in Q3 FY22. EBITDA margin stood at 6.4 percent in Q4 FY22 as compared to 6.6 percent in Q3 FY22. EBITDA is earnings before interest, tax, depreciation and amortization.

The company's net profit for the year was Rs 7,055 crore ($ 931 million) higher by 28.7 percent. Cash Profit for the year was Rs 9,848 crore ($ 1.3 billion) higher by 32.1 percent.

As the operating environment improved progressively, the pace of new store expansion resumed. During the year, over 2,500 stores were opened, taking the total count to 15,196 stores. The registered customer base grew to 193 million, up 24 percent YoY. The company said it added an unprecedented 150,000 new jobs during the year, taking the total employee count to over 361,000, making "Reliance Retail one of the largest employers in the country".

Mukesh D. Ambani, chairman, and managing director, RIL said, "Despite the challenges of the pandemic and heightened geopolitical uncertainties, Reliance has delivered a robust performance in 2021-22. I am pleased to report strong growth in our digital services and retail segments. I am pleased to report that our retail business has crossed the 15,000 store benchmark."

Reliance Retail acquired Clovia, a women’s intimate wear brand, to bolster its lingerie brand portfolio. Reliance Retail also acquired stakes in Indian designer wear brands - AK-OK, Abraham & Thakore, Abu Jani Sandeep Khosla and formed a JV for a new brand with Rahul Mishra during the quarter.

Abhijeet Bora, a senior research Analyst at Sharekhan, said, "There is a slight disappointment on the retail side. Some impact of January end would have been the reason for the miss. In a normalized scenario where we don’t have COVID issues in the future. I think they will continue to grow the revenue, improve the margin and gain market share."

Prakash Diwan, a market expert, said, "The company in the last few years has been busy setting up various parts of the retail vertical – different formats, different brands. So retail will make a comeback willy-nilly, if not this quarter, maybe a few quarters down the line and when that happens you have a platform business that is ready to fire as soon as consumption comes back. So I won’t be surprised if retail becomes the biggest contributor in terms of revenue."

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First Published:May 6, 2022 8:03 PM IST