Retail India News: Garmin Eyes Double-Digit Growth in India with New Investments and Expansions

Reliance Industries Ltd (RIL), led by Mukesh Ambani, released its financial results for the second quarter of the fiscal year 2024-25 (Q2FY25) on October 14. The company reported mixed performance, with growth in its retail and digital services segments, while challenges persisted in its oil-to-chemicals (O2C) business. In the retail space in India, RIL continues to expand its operations and maintain a strong presence.

The conglomerate reported a 4.8 percent decline in profit, posting Rs 16,563 crore compared to Rs 17,394 crore in the same period of the previous year. Revenue from operations slightly increased to Rs 235,481 crore, up from Rs 234,956 crore in Q2FY24. 

Performance Highlight

In Q1FY25, Reliance posted a profit of Rs 15,138 crore, down 5.5 percent year-on-year from Rs 16,011 crore in Q1FY24, while revenue was Rs 236,217 crore. The Q2 financial results came after RIL’s announcement on October 7, where it outlined plans to hold a board meeting to consider the financial results for the quarter and the half-year ending September 30, 2024.

Media and Entertainment Business

Reliance’s media business saw a 2.1 percent drop in operating revenue, largely due to a decline in its movie segment, which is project-based. The News portfolio, however, grew by 6 percent, driven by the digital segment’s advertising revenue. Despite this, the television advertising environment remained weak, with volumes declining by over 20 percent year-on-year. Viacom18 Studios, a part of RIL’s entertainment business, experienced a 5 percent revenue drop, primarily due to the absence of major film releases in Q2FY25 compared to two big releases in Q2FY24.

Oil and Gas Segment

The Oil and Gas segment witnessed a 6 percent drop in revenue due to lower price realizations, partially offset by increased volumes in the KGD6 and CBM fields. The average price for KG D6 gas was $9.55/MMBTU in Q2FY25, down from $10.46/MMBTU in Q2FY24. EBITDA in the segment increased by 11 percent, reaching Rs 5,290 crore, with an EBITDA margin of 85 percent.

Oil-to-Chemicals (O2C) Business

The O2C segment posted a 5.1 percent year-on-year revenue increase to Rs 155,580 crore, driven by higher volumes and increased domestic product placement. However, segment EBITDA fell 23.7 percent year-on-year to Rs 12,413 crore, impacted by an unfavorable demand-supply balance and declining margins in transportation fuel and downstream chemicals.

Retail and Digital Services

The retail segment continues to expand, with 464 new store openings in Q2, bringing the total store count to 18,946 and operational space to 79.4 million sq ft. Mukesh Ambani emphasized the importance of expanding consumer touchpoints and product offerings said, “The retail business continues to partner with renowned domestic as well as global players, expanding its basket of quality product offerings.”

Isha Ambani, Executive Director of Reliance Retail Ventures added, “Reliance Retail continues to make investments in technology and infrastructure to build a strong foundation for future growth.”

Reliance Retail posted Q2 revenue of Rs 76,302 crore, down 1.1 percent year-on-year, with EBITDA slightly rising by 0.3 percent to Rs 5,850 crore. Footfall increased by 14 percent year-on-year to over 297 million, and the registered customer base grew to 327 million.

In the digital services segment, Reliance Jio recorded revenue growth of 17.7 percent year-on-year, with Q2 revenue at Rs 37,119 crore. EBITDA grew by 17.8 percent to Rs 15,931 crore, driven by increased average revenue per user (ARPU) of Rs 195.1. Jio’s subscriber base grew by 4.2 percent to approximately 479 million.

Mukesh Ambani highlighted the robust growth in digital services and the resilience of RIL’s diversified portfolio said, “Our performance reflects robust growth in Digital Services and Upstream business, which helped partially offset weak contribution from O2C business.”

Future Outlook

Reliance continues to focus on scaling up its retail and digital businesses. Capital expenditure for Q2FY25 stood at Rs 34,022 crore, with consolidated revenue at Rs 258,027 crore. Despite challenges in certain sectors, RIL remains optimistic about its growth trajectory in India, especially in retail and digital services.