Higher bill value more than compensated for the lower footfall at Reliance Retail Ventures Ltd’s (RRVL) grocery stores in the September quarter, as consumers were wary of visiting physical retail outlets amid the covid-19 crisis.
The subsidiary of the oil-to-telecom conglomerate Reliance Industries Ltd (RIL), recorded robust growth across all consumption baskets in July-September, posting revenue of ₹41,100 crore, up from ₹31,620 crore in Q1, as restrictions were eased across India and physical stores resumed business.
“The strong growth momentum in grocery was sustained as it delivered yet another quarter of performance well ahead of market. The quarter saw the continued trend of lower footfalls being more than offset by higher bill values," the company said in a statement.
Under the grocery segment, staples and processed food categories drove growth, with home and personal care products delivering strong performance as consumers continued to work from home.
Reliance Retail is set to buy Future Group’s retail, wholesale and logistics business for ₹24,713 crore. However, the deal faces a legal hurdle with Amazon.com Inc. winning a stay order from Singapore International Arbitration Centre. Despite the order, RIL has said it will proceed with the deal.
Reliance Retail registered “4X increase in orders (under JioMart-kirana stores partnerships) over Q1FY21. With a strong value proposition and uninterrupted service despite operating constraints, JioMart continues to win the trust of kirana partners", RIL said.
The firm's operating revenue (earnings before interest, tax, depreciation and amortisation) was ₹2,009 crore in the quarter, compared to ₹2330 crore in the year-ago period, while Ebitda margin fell to 5.4% from 6.3% last year.
“Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country,'' said Mukesh Ambani, chairman, RIL.
Besides grocery, other segments also recovered from covid-led disruptions in April and May, with connectivity, consumer electronics and fashion and lifestyle clocking significant improvement.
While revenue from consumer electronics doubled compared to the June quarter, “and notably double-digit growth over the previous year, despite lower footfalls", demand for laptops, productivity devices, high-end televisions, air care and appliances jumped.
Though all segments of the retail business have recovered with gradual opening of physical stores, footfall is yet to touch pre-covid levels. RIL said activity in retail will reach pre-covid levels in the December quarter along with festival demand supporting growth.
“Increased footfall and store openings have contributed to the rebound in retail revenues, with 85% of stores now open," V. Srikanth, joint chief financial officer (CFO) of RIL, said in a virtual press conference on Friday.
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