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Reliance Retail Limited (Best Proxy for the Consumption
Story of India)
Reliance Retail Limited is a wholly owned subsidiary of Reliance Industries Limited (RIL)
through one of its subsidiary Reliance Retail Ventures Limited. It has started the retail revolution in
India and is India’s largest modern trade retailer by reach, scale, revenue and profitability. It is ranked 94th and is the 6th fastest growing retail company in the world as per Deloitte’s Global Powers of Retailing 2019. Reliance Retail aims to be amongst top 20 retailers in the next 5 years. It has established presence across key consumption baskets and holds a leadership position in food, consumer electronics and fashion retailing . It has a mission to provide millions of customers with unlimited choice, outstanding value proposition, superior quality and unmatched experience across the full spectrum of products and services.
Reliance Retail Limited achieves its robust growth due to its three core initiatives: 1. Integrating Value Chain – Connecting Suppliers, small and large, to B2B and B2C customers through pan-India
ecosystem. 2. Digitisation – Connecting Physical and digital spaces, with endless kiosks and multiple payment modes with
real-time analytical support. 3. Bridging Urban-Rural divide – Bringing quality products at affordable prices to smaller tier cities, meeting
demand gap and offering employment.
Parameters
Performance as on 31st March, 2019
Performance of Q2 ending 30th
Sept, 2020
Retail Store Network
10,415
10,901
Retail Space Coverage
22 million sqft
24.5 million sqft
Addition of new Stores
8 Stores per day
4
Stores per day
(approx.)
Addition of new stores
2,829
337
Customers served
1 Lakh per hour
-
Television Set Sold
1 in every 24 seconds
-
Phones sold
1 in every 2 seconds
-
Groceries sold
6.4 lakh tonnes
-
Garments sold
4 lakh per day
-
With the acquisition of Hamleys, it has increased its presence in 18 countries
and is the global leader
in children premium toys category.
In 2018-19, the company achieved
a total revenue of ₹
1,30,566 crore
from ₹
69,198 crore
in 2017-18 which is an increase of 88.7%
year on year.
The Retail arm of reliance operates through stores and service concepts such as:
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MANAGERS PVT. LTD.
Reliance Retail
Limited
also has exclusive partnerships with some of the most famous and iconic brands in India as well as globally
which include:
Key Highlights
Reliance Retail Ventures Limited
has a shareholding of 99.5%
in Reliance Retail limited.
India’s largest
and fastest growing retailer with 10,901
retail stores
across the across the country
as on Q2 ending 30th
Sept’19.
CRISIL
as on June, 2019 has rated
its long term instruments
of ₹
250 crore Proposed Fund-Based Bank limits
and₹
2,750
crore Fund Based Facilities
to CRISIL AAA
and has a stable outlook
on its instruments.
CRISIL
has also reaffirmed
its rating of CRISIL A1+
to its ₹
20,000 crore worth of commercial paper.
It is virtually a debt free company
with zero long term borrowings
as of FY2018.
The retail stores
have witnessed over 154
million footfalls
for Q2 ending 30th
Sept’19
which has
increased by 11.60%.
The Revenue
has seen a 7 fold increase
and the Profit
has witnessed a 14 fold increase
in the past 6 years.
The total revenue of Q2
of FY2019-20
is at ₹
41,202
crore
which has grown at 27% year on year.
The net profit
(PAT)
of Q2 of FY2019-20
stood at ₹
1,148 crore
which has increased by 55.80%
year on year.
The PBDIT
for Q2 of
FY2019-20
has grown at 66.81%
year on year to ₹
2,322
crore from ₹ 1,392
crore.
Growth Story in Graph
Financial Highlights
(in Crores)
Metrics
2016-17
2017-18
2018-19
Q2 ending 30th Sept'19
2019-20 Extrapolated
3 Year CAGR
Net Worth
6,819.57
9,066.46
12,587.41
12587.41**
16,363.63
35.86%
Total Assets
11,672.42
24,084.41
34,377.55
39,250.00
44,690.82
71.62%
Total Revenue
26,473.13
51,501.73
1,01,946.52
41,202.00
1,32,530.48
96.24%
PAT 442.60 1,243.14 3,138.26 1,148.00 4,079.74 166.28%
Basic EPS (in ₹ per share) 0.83 2.34 6.29 2.30 8.18 175.28%
Diluted EPS (in ₹ per share) 0.83 2.29 6.29 2.30 8.18 175.28%
*All figures have been taken as per annual report of Reliance Retail for the FY2017-18 and Reliance Industries Limited for the FY2018-19 and Q2 of FY2019-20. Growth rate for the FY2019-20 has been taken at 30%.**Net Worth kept same as on 31 st March’2019 as the data has not been released for the same in Q2 of FY2019-20.
-
2,000
4,000
6,000
8,000
10,000
12,000
Retail Stores
2,6213,245
10,90110,415
7,573
3,616
CAGR-33%
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Disclaimer and Limitation of Liability
The report is not for public distribution and has been furnished solely for information and must not be reproduced or redistributed
to others None can use the report as a base for any claim, demand or cause of action and, also none is responsible for any loss
incurred based upon. The investments discussed or recommended in this report may not be suitable for all investors. Opinion
expressed is the current opinion as of the date appearing on the material only.
Further, the information in the document has been printed on the basis of publicly available information, internal data and o
sources believed to be true and are for general guidance only but which may have not been verified independen tly. While every
effort is made to ensure the accuracy and completeness of information contained, the company takes no responsibility and
assumes no liability for any error/ omission or accuracy of the information. Recipients of this material should rely o n their own
judgments and conclusions from relevant sources before making any investment.
The investment advice should not be considered to be or taken as an offer to sell or a solicitation to buy/sell any security. Price
and value of the investments referred to in this material are subject to volatility. Past performance is not a guide for future
performance.
Valuation Highlights
ther
(in Crores)
Metrics 2017-18 2018-19 2019-20
Extrapolated
Market Capitalization - 3,34,299.18 -
Promoter Shareholding (%) 99.95% 99.95% 99.95%
Net Worth 9,066.46 12,587.41 16,363.63
Total Revenue 51,501.73 1,01,946.52 1,32,530.48
Earnings per share (in ₹ per share) 2.29 6.29 8.18
Return On Equity (ROE) (in %) 13.71% 24.93%
-
EBIT Margin (in %) 3.00% 4.20% -
PBT Margin (in %) 3.64% 4.73% -
PAT Margin (in %) 2.41% 3.08% -
Market Cap./Sales ratio - 3.28 -
Forward Market Cap./Sales ratio - - 2.52
Face Value per share (in ₹ per share) 10/- 10/- 10/-
*For calculation of forward Market Cap to Sales ratio, growth rate for the year 2019-20 has been taken at 30%.
Source: QUANTMAC