Reliance Retail will be our fastest growing business in revenues and Ebitda: Mukesh Ambani

What helps Reliance Retail is the fact that it has no competition at scale. Image: Indranil Aditya/NurPhoto via Getty Images 

Reliance Retail will emerge as Reliance Industries’ most rapidly expanding business and the biggest contributor of revenues and Ebitda, said Mukesh Ambani, chairman of Reliance Industries Limited (RIL), at the company’s 46th annual general meeting (AGM) on August 28.

 “I am confident that as India grows from a $2500 per-capita economy to a $10,000 per capita economy, Reliance Retail will be our fastest growing business in revenues and EBITDA,” said Ambani. [Disclaimer: Reliance Industries is the owner of the Network18 group, which publishes Forbes India].

Reliance Retail reported revenue of Rs260,364 crore in FY23, a 30 percent jump over the previous fiscal. Its Ebitda stood at Rs17,928 crore, while its net profit was Rs9,181 crore in the same period.

For perspective, Reliance Retail’s closest competitor, DMart operator Avenue Supermarts, reported revenue of Rs.41,833 crore in FY23. Its Ebitda was Rs3,659 and net profit stood at Rs2,556 crore in FY23.

That’s a 6x gap in terms of revenue. “Reliance Retail has done exceptionally well in demonstrating growth with profitability,” Arvind Singhal, founder and chairperson of Technopak Advisors told Forbes India. It’s hardly surprising then that Reliance Retail stands as India’s sole entry in the global Top 100.  

In the days prior to the AGM, Mukesh Ambani announced that Qatar Investment Authority, the country’s sovereign wealth fund, will invest Rs8,278 crore in Reliance Retail for a one percent stake. The deal values the retail arm at a cool Rs8.27 lakh crore or $100 billion, almost double of what it was valued at less than three years ago in 2020.

Reliance Retail has invested over $10 billion in the retail segment in the last two years, noted Ambani. The investment has paid off with the company recording many firsts in FY23: 100 crore transactions, a 42 percent year-on-year growth and 78 crore footfalls. It added 3,300 new stores to make a total of 18,040 stores covering 6.56 crore sq.ft of retail area. Two-thirds of these outlets are in Tier II and Tier III cities. “This is testament to our commitment of making retail inclusive,” said Isha Ambani, Reliance Retail’s head and now an RIL board member.

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Moreover, digital sales, from platforms such Ajio.com, JioMart and others, contributed Rs50,000 crore—roughly 20 percent of total revenues. “The company has around 25 crore registered customers, serving over 30 percent of India’s potential consumers, ranking us in the top-100 globally visited retailers,” said Ambani.

In fact, integrating JioMart with WhatsApp has resulted in a 9x increase in customers since 2022. JioMart has on-boarded 25,000 artisans, weavers and micro-entrepreneurs providing them with the support needed to modernise their processes and offerings. 1.6 lakh products of artisans from 150+ cities are available on Reliance Retail’s platforms, Isha noted.

“The business has robustly expanded into various categories through brand collaboration and partnerships. We aim to modernise heritage Indian brands for today’s consumers, maintaining their long-standing reputation,” said Isha. She noted that Reliance Retail’s acquisitions of iconic Indian brands such as Campa Cola, Sosyo and Lotus, in the recent past, exemplify this.

What helps Reliance Retail is the fact that it has no competition at scale. DMart serves as competition in the general merchandise category; Shoppers Stop, H&M and Puma in the fashion and lifestyle segments; HUL, ITC and Tata in the FMCG space; Amazon, Flipkart and BigBasket in ecommerce, and the recently-launched beauty portal Tira contends with Nykaa. “There isn’t a conglomerate structure that straddles value, mid and luxury retail across product categories in the way Reliance Retail. It is in a class of its own,” says Singhal.  

Analysts were hoping for an announcement regarding Reliance Retail’s separate listing – however, no mention of it was made during the AGM. Ambani only said that the company will provide an update on investor interest in Reliance Retail in due course. Over the last few months, RIL has bought Rs1071-crore worth of minority shareholders’ interest in Reliance Retail—a move that can be seen as paving the way for an eventual public offering.