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Reliance Industries Ltd. - Company Analysis (Part-1)

Reliance Industries Ltd. - Company Analysis



RIL is a company that has made its place in Fortune Global 500 at 96th Position & in Fortune Global 2000 at 58th Position.

First Company in India to achieve a Market Capitalisation Of 10 Lakh Cr.

RIL serves customers through 6 different businesses 

1) Retail

2) Digital Services

3) Media & Entertainment

4) Refining & Marketing

5) Petrochemicals

6) Exploration & Production

Source Reliance Industries Ltd. Annual Report 2019-20


1) Retail

RIL operates its retail business with having 11,784 stores under its Retail Business. The stores are spread in a total area of 28.7 MILLION SQFT.

Reliance Retail's Revenue is having a CAGR of 56% which is just a tremendous growth. Its EBITDA is growing at a CAGR of 64% & Its stores are increasing at a CAGR of 35%.

Reliance Retail is increasing rapidly in terms of revenues, profit & even in a number of stores.

RIL has stores in 3 consumer segments:- Consumer Electronics, Fashion Lifestyle & Grocery.

Consumer Electronics

Reliance Digital is India’s largest big-box retail chain offering a wide range of products across all key categories of mobiles, computing, household appliances such as televisions, washing machines, air conditioners, coolers, refrigerators, cameras, speakers, and many more.

The Consumer Electronics market is estimated at US$53 billion in FY 2019-20 and is expected to grow at a CAGR of 11% over the next 5 years to reach US$91 billion by FY 2024-25. The organized Consumer Electronics market is estimated at US$18.2 billion in FY 2019-20 with a penetration of 34%.

In Consumer Electronics they have 8,601 stores which are 73% of store share. They have a presence in 7000+ Towns and Cities. In FY 2019-20, they had 23 Cr. Footfalls.

Fashion Lifestyle

Reliance Retail is the largest fashion & lifestyle retailer in India with offerings across all income segments covering value, mainstream, premium, affordable luxury, and luxury. Reliance Retail manages an end-to-end value chain across apparel, footwear, accessories, toys, and much more through the bouquet of store concepts.

The Fashion & Lifestyle market is estimated at US$139 billion in FY 2019-20 and is expected to grow at a CAGR of 11% over the next 5 years to reach US$233 billion by FY 2024-25. The organized Fashion & Lifestyle market is estimated at US$40 billion in FY 2019-20 with a penetration of 29%.

In Fashion Lifestyle, they have 2,386 stores which are 20.2% of the store's share. They have a presence in 450+ Towns and Cities. In FY 2019-20, they had 17 Cr. Footfalls.

Grocery

Reliance Retail is the largest grocery retailer in India with a presence of 797 stores across 180+ towns and cities.

Reliance Retail operates four engaging store concepts viz. Reliance Fresh, Reliance SMART, SMART Point, and Reliance Market, delivering benefits of modern shopping experience to consumers.

Reliance Fresh is the neighborhood store offering daily needs and essential items across fresh foods, staples, FMCG, home and personal care, and much more with a focus on offering convenience, quality products, and ensuring availability.

Reliance SMART is a destination store concept offering a wide variety of products across fresh foods, staples, FMCG, home and personal care, beauty & cosmetics, value apparel & footwear, general merchandise, and much more in an all under one roof set. 

SMART Point, a smaller avatar of SMART store, is a one-stop multi-purpose store concept housed in residential neighborhoods offering SMART’s price promise across all grocery needs, pharmacy, and assisted Digital commerce. 

Reliance Market is the wholesale cash and carries store concept serving households, kiranas, hotels, restaurants, and catering (HORECA), institutions, and B2B member partners. Reliance Market is the largest cash and carries chain operating over 52 stores across 46 cities.

The Food & Grocery market is estimated at US$545 billion in FY 2019-20 and is expected to grow at a CAGR of 9% over the next 5 years to reach US$850 billion by FY 2024-25. The organized food and grocery market are estimated at US$21 billion in FY 2019-20 with a penetration of 3.7%.

In Grocery, they have 797 stores which are 6.8% of the store's share. They have a presence in 180+ Towns and Cities. In FY 2019-20, they had 24 Cr. Footfalls.

Petro Retail

PETRO RETAIL Reliance Retail is a leading private sector petro retail operator with 519 owned Petro Retail outlets. These outlets are spread across India with a focus on serving highway corridors between major cities.

Reliance Petro Retail outlets yield significantly higher volumes than the industry average led by efficient processes, technology backbone, and well-trained employees. 

The petro outlets offer diesel, petrol, and LPG to their customers with a focus to serve high-quality fuels.

Connectivity

Reliance Retail works as the Master Distributor for Jio connectivity services. 

The distribution network comprises over 8,100 Jio stores and a vast network of retailers across the country for new customer acquisition and recharges.

Reliance Retail Business Performance

The gains of modern retail are being brought to the real ‘Bharat’ as more than 2/3rd of stores are operated in Tier II, Tier III, and Tier IV towns.

The business model is witnessing the benefits of operational efficiencies with margin growth outpacing the exponential revenue growth.

Revenue Division in Retail Business

  • In Consumer Electronics, Revenue is ₹5,440 Cr. more than last year which is a 14% upside. Total Revenue is ₹44,625 Cr.
  • Fashion Lifestyle, Revenue is ₹2,624 Cr. more than last year which is a 24% upside. Total Revenue is ₹13,552 Cr.
  • Grocery, Revenue is ₹11,182 Cr. more than last year which is a 48% upside. Total Revenue is ₹34,601 Cr.
  • Connectivity, Revenue is ₹12,207 Cr. more than last year which is a 28% upside. Total Revenue is ₹55,943 Cr.
  • Petro Retail, Revenue is ₹912 Cr. more than last year which is a 7% upside. Total Revenue is ₹14,215 Cr.
  • On Average Revenue of Reliance Retail grew by 24.2%.

JioMart

Reliance Retail is now embarking on a journey to transform traditional retail through its JioMart Digital Commerce Platform.

Business ensured that more than 98% of the grocery stores were operational, sufficiently stocked with essentials, and re-aligned store layouts for quick service.

It increased capacity for home delivery, enabled “buy online pick up in-store” to prevent crowding at stores, introduced “combos” to reduce shopping time, and launched bulk ordering for residential societies.

As much as COVID-19 was a disruption, the business also viewed it as an opportunity to strengthen its partnership with the Kirana ecosystem. During the lockdown, JioMart provided uninterrupted services to kiranas across Navi Mumbai, Thane, and Kalyan and witnessed an order flow increase of 4x times of pre-lockdown period. JioMart also commenced WhatsApp ordering for consumers through its partnership with Facebook.

Taking a 3600 view of the customers, the business is strengthening digital commerce and omnichannel capabilities, bolstering its supply chain/fulfillment capacity to handle 10x home delivery. The lockdown has provided valuable learnings for JioMart’s business model and yielded encouraging progress. This will enable the accelerated roll-out of JioMart Digital Commerce. Business is further building a strong own brand portfolio in apparel and grocery in keeping with emerging consumer trends.


Read More:

Reliance Industries Ltd. - Company Analysis (Part-1)

Reliance Industries Ltd. - Company Analysis (Part-2)

Reliance Industries Ltd. - Company Analysis (Part-3)

Reliance Industries Ltd. - Company Analysis (Part-4)

Reliance Industries Ltd. - Company Analysis (Part-5)

Reliance Industries Ltd. - Company Analysis (Part-6)

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