Reliance Retail reported 8.2% year-on-year revenue growth in Q1 FY27, but net profit declined 14.2% as continued investments in digital commerce weighed on margins. The company is shifting its strategy towards profitable digital growth, backed by strong JioMart expansion, rising omnichannel adoption, and steady growth across grocery, electronics, fashion and FMCG businesses. Management expects digital investments to improve margins and cash generation over the next two years.
Reliance Retail Ventures Ltd (RRVL) reported a mixed performance for the first quarter of FY27, with revenue registering healthy growth while profitability declined amid continued investments in digital commerce. The company said it is prioritising profitable growth over aggressive market share expansion and expects its online business to deliver stronger margins and generate cash over the next two years.
Revenue Rises, But Profit and Margins Decline
For the quarter ended June 2026, Reliance Retail's revenue from operations increased 8.2% year-on-year to ₹79,745 crore from ₹73,720 crore. Gross revenue rose 7.4% to ₹90,408 crore from ₹84,171 crore. Excluding the demerger of Reliance Consumer Products (RCPL), gross revenue grew 11.6%.
Despite higher revenue, the retailer's net profit fell 14.2% to ₹2,806 crore from ₹3,271 crore in the year-ago period. EBITDA stood at ₹6,309 crore, while the EBITDA margin narrowed by 80 basis points to 7.9% from 8.7% a year earlier. EBIT also declined 6.9% to ₹4,529 crore from ₹4,866 crore as investments in digital commerce and related infrastructure continued to increase fixed costs. Checkout impact on Reliance Industries Ltd stock price.
Digital Business to Focus on Profitability
Deputy Chief Financial Officer Dinesh Taluja said Reliance Retail is entering the next phase of its digital journey, with the focus shifting from expanding market share to achieving sustainable profitability.
According to the management, investments are being concentrated in micro markets that have a clear path to positive unit economics. The company expects the scale achieved during the current year to translate into improved margins and stronger cash generation over the next two years. Taluja added that growth will remain disciplined and funded through existing profits, while investments will be reduced in markets that fail to meet the company's financial benchmarks.
JioMart Growth Continues to Accelerate
Reliance Retail's digital business maintained strong momentum during the quarter. Total digital transactions increased 46% year-on-year to 568 million from 389 million, significantly outpacing revenue growth. The company attributed this to a sharp rise in grocery orders, which generally have lower average order values.
JioMart reported a 116% year-on-year increase in average daily grocery orders and now serves around 5,500 pin codes across more than 2,500 cities. More than 2,500 Digital and Fashion & Lifestyle stores are connected to two-hour delivery services, strengthening the company's omnichannel capabilities.
Reliance Retail also benefits from an extensive fulfilment network comprising over 3,100 multi-format stores and more than 800 dedicated dark stores, providing a structural advantage in servicing online demand.
Strategy Focuses on Better Unit Economics
The retailer has outlined a three-year roadmap centred on improving profitability rather than pursuing growth at any cost. The company plans to enhance repeat purchase rates, increase order density, improve delivery reliability, optimise delivery costs and raise contribution margin per order.
Management also plans to improve economics by increasing the share of private labels, expanding marketplace income and driving higher customer retention. The company said investments will continue only in markets where these targets are achievable.
Store Expansion and Customer Base Continue to Grow
Reliance Retail continued expanding its physical footprint by opening 252 new stores during the quarter, taking its total network to 20,169 stores with a retail area of 78.4 million sq ft.
The registered customer base increased 10.6% year-on-year to 396 million. Customers using both digital and physical channels spent 2.7 times more than those shopping exclusively through offline stores, highlighting the growing importance of the company's omnichannel strategy.
Core Businesses Deliver Healthy Growth
The grocery business reported 7% like-for-like growth, supported by regional festivals and category-focused campaigns. Consumer electronics registered 16% growth, driven by strong demand for air conditioners, laptops, smartphones and small appliances. Fashion and Lifestyle recorded 4% growth, aided by merchandise refreshes and store upgrades.
Digital channels continued to gain traction, with online sales accounting for 27% of apparel and footwear revenue, up more than 490 basis points from a year earlier. Ajio Rush recorded 136% sequential growth in orders, while the Shein app crossed 30 million downloads. The resQ services business also posted 27% year-on-year revenue growth.
FMCG Business Records Strong Momentum
Reliance Consumer Products more than doubled its gross revenue to ₹8,600 crore during the quarter. The Independence brand generated sales of ₹3,200 crore, while Campa contributed ₹2,900 crore.
The company also announced that Campa will expand internationally by entering Australia this month and Africa in the next quarter. Additionally, Reliance has converted its beverage joint venture with Sosyo into a majority-owned subsidiary and is setting up a new edible oil manufacturing plant in West Bengal, further strengthening its FMCG business.
