Reliance Retail reported a decline in profitability for the second quarter of the 2026–27 financial year, even as its revenue continued to grow. The retail arm of Reliance Industries posted a consolidated profit after tax (PAT) of ₹2,619 crore for the quarter ended September 30, marking a 24.5% fall compared with ₹3,469 crore in the corresponding period last year.
The results, announced on October 30, showed that the company’s gross revenue increased by 6.4% year-on-year to ₹91,716 crore, compared with ₹86,169 crore in the previous year’s September quarter. The revenue growth figures were adjusted to account for the demerger of the consumer brands business.
Revenue from operations rose 5.8% to ₹80,220 crore from ₹75,836 crore a year earlier, indicating continued expansion across the company’s retail operations.
Higher Investments and Seasonal Changes Affect Profitability
The decline in profit came amid increased spending on digital commerce and quick-commerce operations, along with higher operating costs. The company also faced a shift in the timing of major festivals, with much of the festive shopping activity moving into the December quarter.
This change affected the comparison with the previous year, as festive demand typically supports sales across grocery, fashion, electronics and other retail categories.
Reliance Retail has continued investing in its digital platforms and business-to-business operations while expanding its physical retail network. These investments are intended to strengthen its presence across different shopping channels, although they have contributed to pressure on margins in the short term.
Input-cost inflation also affected the business, with the company absorbing some of the additional costs rather than passing the entire increase on to customers.
Operating Margins Come Under Pressure
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) from operations declined 11.1% year-on-year to ₹5,886 crore during the quarter, compared with ₹6,624 crore in the same period last year.
EBITDA before a one-time impairment charge stood at ₹6,228 crore, down 8.6% from ₹6,816 crore a year earlier. The corresponding margin declined by 120 basis points to 7.8%, compared with 9% in the September quarter of FY26.
After accounting for a one-time impairment charge of ₹108 crore, EBITDA stood at ₹6,120 crore. The charge was associated with the discontinuation of underperforming 7-Eleven stores.
Higher depreciation and finance costs also added pressure to the company's financial performance during the quarter.
Store Network Expands Despite Closures
Reliance Retail opened 303 stores during the July–September period, taking its total network to 19,947 stores as of September 30. However, after accounting for the closure of underperforming locations, the company recorded a net reduction of 222 stores.
Its retail operations covered approximately 77.5 million square feet of space at the end of the quarter.
Customer transactions increased 7% year-on-year, despite the shift in the festive calendar. The growth suggests that customer activity remained active across the company’s physical stores and digital channels.
Consumer Business Continues to Grow
Reliance Consumer Products, the group's fast-moving consumer goods business, also recorded growth during the quarter. Its gross revenue increased 1.6 times year-on-year to ₹8,266 crore.
The performance reflects the group's broader effort to expand its consumer brands alongside its established retail operations.
Reliance Retail now faces the task of balancing investment in digital expansion with profitability and operating efficiency. The December quarter will be important because it includes major festive and seasonal shopping periods that shifted out of the September quarter.
While revenue growth indicates continued business activity, the latest results highlight the pressure that expansion costs, inflation and seasonal changes can place on earnings.
