Reliance Retail Q2 FY27 Profit Drops 24.3% Despite Revenue Growth

Reliance Retail Ventures Limited (RRVL) reported a significant decline in net profit for the second quarter of the 2026-27 fiscal year, with earnings falling 24.3 percent year-on-year to ₹2,611 crore. The company disclosed this update on Friday, highlighting some key operational developments impacting the results.

RRVL took a one-time impairment charge of ₹108 crore during the quarter due to the decision to discontinue its 7 Eleven store operations in India. This move aligns with the company’s strategy to streamline its physical retail presence and focus on more profitable formats. It also noted that the upcoming festival quarter, which traditionally drives higher sales, falls entirely in the third quarter, suggesting that the strong seasonal demand impact will be reflected later.

Isha Ambani, Executive Director of Reliance Retail, commented on the quarterly results by emphasizing the company’s commitment to blending a vast physical network with digital innovation. She stated, "Our customers’ trust and continued engagement across our stores and digital platforms remain central to our growth. We are building a future-ready retail business by combining our extensive physical network with digital convenience, technology, and a deep understanding of Indian consumers." She further explained that the digital commerce and business-to-business (B2B) channels are expanding rapidly and are currently funded by profits from the traditional offline retail business.

Despite the dip in net profit, Reliance Retail continues to invest in sustainable growth areas, aiming to offer Indian consumers a combination of quality, value, and choice, especially during the critical festival season.

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) from operations declined by 11.1 percent to ₹5,886 crore, reflecting margin pressures in the quarter. Additionally, finance costs rose sharply by 53.9 percent year-on-year, reaching ₹905 crore, which contributed to the reduction in overall profitability.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, praised the steady performance across all retail formats and channels. He noted, "Consumer demand stayed healthy, supported by our extensive physical and digital presence and our continued focus on serving the diverse needs of Indian consumers." He also highlighted the sustained growth in the consumer products segment, where the fast-moving consumer goods (FMCG) portfolio gained a stronger foothold among Indian shoppers.

Revenue from operations for Reliance Retail increased by 5.8 percent year-on-year to ₹80,220 crore during the quarter, while gross revenue rose 6.4 percent to ₹91,716 crore after adjusting for the demerger of the consumer brands business. Sequentially, revenue remained nearly flat, and net profit decreased by 6.9 percent.

The company adjusted its store footprint by opening 303 new outlets but closed 525 underperforming stores, resulting in a net reduction of 222 stores. This brought the total number of Reliance Retail stores to 19,947, covering a retail space of 77.5 million square feet across India.

Separately, Reliance Consumer Products showed strong growth with gross revenue reaching ₹8,266 crore in the July-September period, marking a 1.6 times increase year-on-year. The daily essentials category contributed ₹7,000 crore in sales during the first half of FY27, underscoring the growing consumer demand for everyday products.

Reliance Retail operates as India’s largest retailer and has been actively expanding both its physical and digital channels to capture a broad customer base. The company’s strategy to integrate offline stores with online platforms aims to meet the evolving preferences of Indian consumers who seek convenience, variety, and competitive pricing.

The results for this quarter reflect the challenges faced in a competitive retail environment, including rising financing costs and operational restructuring. However, the focus on digital commerce and key consumer categories indicates the company’s efforts to adapt and grow in the rapidly changing retail sector.