RIL sees Reliance Retail, Jio as hyper growth platforms

RIL sees Reliance Retail, Jio as hyper growth platforms

NEW DELHI: Reliance Retail and Reliance Jio will be “hyper growth platforms” for the Mukesh Ambani-led conglomerate in the next 10 years — which the company calls its golden decade.

Reliance Industries sees robust and sustainable growth in both consumer-facing sectors, apart from strong cash flows from its flourishing core businesses of energy and petrochemicals, as it reaps rewards of ambitious capital expenditure in recent years, it said in a presentation after the quarterly earnings. “The golden decade has begun. Reliance Retail and Reliance Jio (are) hyper growth platforms. Annuity cash flows from energy and materials businesses,” it said.

Reliance Industries’ net profit, which crossed Rs 9,000 crore in the June quarter, has so far depended heavily on its core businesses of refining and petrochemicals, which are enjoying high margins, but its retail segment has already started making a healthy contribution to turnover. The company said its fuel retail business was also growing rapidly, with average sales higher than rivals and good credibility as it did not have a single complaint of malpractices, such as tampering at pumps.

Jio, which offers low-cost services and virtually free phones for its customers, hopes to gain from increasing use of wireless data in the digital world. The company said it had more than 100 million paid customers, with most users opting for the payment plan of Rs 349 or higher. “Smartphone penetration expected to increase from the current 30% to 60% in next three to four years. One in two users stream video, two in five users are interested in eSports,” it said. Jio already boasts of data traffic of over 125 crore GB and streaming videos of 165 crore hours every month, apart from daily voice traffic of 250 crore minutes.

“Time spent by an average Indian on mobile each week is more than seven times the time spent on television,” it said. Key sectors such as entertainment, education, healthcare and marketplaces were being redefined. It said middlemen were being replaced by direct-to-customer marketplaces. Retail sales of diesel jumped 82% in the past year. “Robust automation of daily fuel pricing at 100% of operational retail outlets, ensuring customers of correct and timely price implementation.

Petrol pumps across the industry have been under scrutiny for meter tampering. No instances of meter tampering has been reported for any of Reliance’s Petro Retail outlets, indicating strong operational credibility,” said Reliance. It also said its pumps had smoothly adopted daily price changes. Dealers of state firms had repeatedly protested against the change, which the oil ministry says had helped pump owners make big money at the cost of oil firms.

Sale of petroleum products, apart from consumer electronics and connectivity, was a key part of its overall retail sales, which had shown “strong and sustainable growth,” the company said. Nearly two-thirds of its retail business is done with non-cash modes.