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Financial Analysis

Reliance Retail EBITDA Down by 50% in First Quarter

Reliance Industries yesterday has given the earning detail for Q1FY21 to the exchanges. The consolidated revenue has decreased by 42% in the first quarter of FY21 as compared to the same period last year. The PAT has gone up from ~10K Crores in Q1FY20 to ~13K Crores in Q1FY21, due to the addition of exceptional gain of ~5K Crores by selling the Petro Retail Marketing business to Reliance BP Mobility Limited (RMBL). Finally, BP has acquired a 49% equity stake in RBML.

At present, Reliance Industries is doing business in many verticals, however, in the unlisted market, we are keen to track the performance of Reliance Retail, the most talked and in-demand unlisted stock. So, let us do that.

Reliance Retail
The EBITDA margins of the Reliance Retail has gone down to 1083 Crores in Q1FY21 as compared to 2060 Crores in Q1FY20. The sharp fall in EBITDA is mainly due to the Covid-19 situation which forced Reliance Retail to completely shut down 50% stores and 29% partially. The EBITDA margins also fell from 6% to 3.80% particularly impacted by drop from profitable categories such as Fashion & Lifestyle.

Reliance Retail gets its revenue from the following business;

1. Consumer Electronics.
2. Fashion & Lifestyle.
3. Grocery.
4. Connectivity.
5. Petro

Revenue Contribution (in Crores)

Retail business 1QFY20 1Q FY21 % Growth YoY % contribution Footfall drop due to lockdown
Consumer Electronics 10618 3243 -69% 10% -65%
Fashion & Lifestyle 3221 939 -71% 3% -90%
Grocery 7633 8027 5% 25% -45%
Connectivity 12997 16,939 30% 54% NA
Petro Retail 3747 2485 -34% 8% NA
Total 38216 31633

From the above table, the major impact in revenue seen due to consumer electronics and the F&L segment, which obviously has low demand during the lockdown, and the same is expected to pick up once the Govt. eases out lockdown conditions. The grocery segment was the essential item during a lockdown, saw 5% revenue growth, despite a 45% fall in footfall. The connectivity segment saw a sharp 30% growth due to JIO’s momentum.

Highlights of the Q1FY21
1. Reliance Retail has Opened 69 new stores and SIS sections; >250 stores could not be commissioned due to the prevailing situation.
2. Reliance Retail going more digital and launched JioMart. Reliance Retail and WhatsApp have entered into a commercial partnership agreement to further accelerate Reliance Retail’s Digital Commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp.
3.Partnerships with kiranas/merchants, vendors and farmer ecosystem to be accelerated.

Reliance Retail Q1FY21 Presentation

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