Reliance Retail Q2 Results: Revenue up 6%, but late festive season, digital spends hit profit

The growth came despite the absence of major festive occasions during the quarter, with the festive calendar shifting to the December quarter.Reliance Retail said its gross revenue growth was 6.4% after adjusting for the demerger of its Consumer Brands business.EBITDA from operations declined 11.1% YoY to Rs 5,886 crore from Rs 6,624 crore in Q2FY26.Live EventsThe EBITDA margin from operations contracted to 7.3% in Q2FY27 from 8.7% in the corresponding quarter last year.The company reported EBITDA of Rs 6,228 crore before a one-time charge of Rs 108 crore, with the margin at 7.8%.

The margin was down 120 basis points year-on-year, reflecting planned investments in digital commerce, input-cost inflation absorbed by the company for customers and the shift in the festive calendar.EBITDA after the one-time charge stood at Rs 6,120 crore, down 10.2% from Rs 6,810 crore in Q2FY26.The company attributed the pressure on profitability to its ongoing investment phase in digital commerce, higher input costs and the festive season moving entirely into Q3.

The quarter included a one-time impairment charge of Rs 108 crore related to 7-Eleven.Reliance Retail's registered customer base crossed 400 million, marking 10% YoY growth. Transactions increased 7% during the quarter, with the company reporting growth across consumption baskets.The retailer opened 303 stores during the quarter, taking its total store count to 19,947 across more than 7,000 towns.JioMart drives digital commerce expansionDigital commerce remained a key growth focus for Reliance Retail, with grocery business-to-consumer (B2C) online revenue increasing 42% YoY.The online share of Grocery B2C increased 270 basis points, while the online share of Apparel and Footwear rose 100 basis points.Units per order increased 24% YoY, indicating customers are building larger baskets to qualify for free delivery.The company said it is measuring dark-store performance through individual cohorts, tracking order density, repeat purchases and cost per order.

According to the company, cost per order declines as order density improves.Consumer Electronics' big-box assortment has also been made available on JioMart with two-hour delivery, while marketplace and seller services are being monetised. Investments in digital commerce are being funded through profits generated by the store business.Consumer electronics and fashion businesses focus on expansionIn Consumer Electronics, revenue growth was led by product availability, sharper pricing and targeted promotions.The company said it is now India's largest retailer of premium products, including mobile phones from leading brands such as Apple and Samsung.

It described lower margins in this category as a strategic investment to acquire high-value customers with significant lifetime value.Its omnichannel reach expanded across Tier 2 and Tier 3 towns, while the distribution business continued to grow, led by mobile phones and laptops.In Fashion and Lifestyle, Apparel and Footwear stores sustained sales despite the absence of full-price festive weeks during the quarter.Reliance Retail said it introduced more than 250 new fashion options every week to maintain product freshness across stores.Its premium and luxury portfolio crossed 1,000 exclusive brand outlets.

Fabletics was launched, an exclusive partnership was signed with SKIMS, and Hugo and Madden NYC sub-brands were introduced.AJIO Luxe expanded its portfolio to 1,040 brands, adding 22 new brands during the quarter. Tira and beauty offerings on AJIO also continued to widen the company's premium customer funnel.FY27 focus on digital scale and operational efficiencyReliance Retail's FY27 priorities include expanding JioMart and omnichannel reach, improving product availability and delivery speed, and strengthening unit economics across individual markets.

Brand partnerships also helped secure electronics availability despite supply-chain disruptions.It will continue expanding its dark-store and supply-chain network, while focusing on improving order density and reducing cost per order.The company said its strategy remains centred on building digital commerce scale during FY27, with investments supported by the profitability of its physical retail business.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)(You can now subscribe to our ETMarkets WhatsApp channel)