Reliance Retail’s September-quarter profit falls 24.5% to 2,619 crore rupees
Key Facts
Reliance Retail reported a 24.5% fall in profit after tax to 2,619 crore rupees in the September quarter, compared with 3,469 crore in the year-earlier period. Revenue from operations rose 5.78% to 80,220 crore rupees from 75,836 crore. But revenue growth did not prevent a decline in operating profit, with earnings before interest, tax, depreciation and amortisation from operations falling 11.1% to 5,886 crore rupees, against 6,624 crore a year earlier. The results show a divergence between revenue expansion and pressure on profitability during the quarter. The differing pace of revenue and profit growth also reflects the effects of costs, investment and the timing of the festive season on the company’s performance.
On a total-revenue basis, the company recorded a 6.43% year-on-year increase to 91,716 crore rupees, from 86,169 crore in the year-earlier period. Coverage linked this growth to the shift of the festive season into the December quarter, changing the timing of some seasonal activity compared with the previous year. Earnings before interest, tax, depreciation and amortisation, before a one-time impairment charge, were 6,228 crore rupees, down 8.6%. The margin fell 120 basis points year on year. The company attributed the pressure to the planned investment phase in digital commerce, absorbing input-cost inflation, and the shift of the festive season into the third quarter. These factors show how growth in total revenue coincided with a contraction in operating profitability measures.
Mukesh Ambani said Reliance Retail had delivered a "steady quarter" and that growth continued across all formats and channels, with consumer demand remaining healthy. The company added that the shift in the timing of the festive season into the third quarter affected business performance. Customer transactions rose 7% year on year during the quarter, indicating that transactions continued despite this shift. But the company did not quantify the independent impact of each factor on profit in these statements. The comparison with the December quarter remains important given the seasonal shift, which the company cited among the reasons for margin pressure and the effect on performance.
At the network level, the company added 303 stores during the quarter, while its net store count fell by 222 after the closure of unproductive outlets. Total stores stood at 19,947 on September 30, up 0.6% year on year from 19,821 a year earlier. Retail space declined 0.4% to 77.5 million square feet, compared with 77.8 million square feet in the year-earlier period. The figures show that gross additions did not translate into a comparable net increase in outlets, while retail space contracted slightly. The company linked the net decline to the closure of unproductive stores.
In digital commerce, the registered customer base exceeded 400 million, growing 10% year on year. Consumer-facing online grocery revenue also rose 42% year on year, and units per order increased 24%. These indicators put digital activity at the heart of the results: the company is expanding the business while describing planned investment in it as one factor weighing on the quarter’s margin. Isha Ambani said the digital commerce model and business-to-business channels were growing, and that profits from the traditional store business were funding them. The statement links the expansion of new channels with their reliance on profits from the traditional business.
The company said its strategy for fiscal year 2027 focuses on scaling e-commerce with financial discipline. It said fiscal years 2028 and 2029 would focus on converting that scale into value. This timeline places the current digital expansion within a plan extending beyond the reported quarter. The stated priority of financial discipline comes alongside a decline in operating profit and margin pressure in the September quarter. The shift of the festive season into the third quarter is an additional factor in assessing the following period’s performance, according to the company’s account of the seasonal timing.