Reliance Retail’s EBITDA Erodes In Q1 Amid Q-Comm Expansion

Quick commerce expansion loomed heavily over Reliance Retail Ventures Ltd. (RRVL) as the retail giant’s EBITDA margin declined 80 basis points to 7.9% in Q1 FY27 as against 8.7% in the year ago quarter. Sequentially, the metric stayed flat at 7.9% in Q4 FY26. 

Reliance Retail attributed the EBITDA hit to associated infrastructure investments in its hyperlocal commerce businesses, which increased fixed cost. Unlike rivals like Blinkit, Instamart and Zepto that deliver within 10 minutes, JioMart’s take on quick commerce is hyperlocal orders delivered under 30 minutes.

On similar lines, EBITDA declined 1.1% to ₹6,309 Cr in the quarter under review as against ₹6,381 Cr in Q1 FY26.

As a result, RRVL’s net profit declined 14.2% to ₹2,806 Cr in Q1 FY27 as against ₹3,271 in the year ago quarter. This came despite revenue from operations jumping 8.2% to ₹79,745 during the quarter under review compared to ₹73,720 Cr in Q1 FY26.

The retail conglomerate also expects the build-out to impact margins in the near term. However, it believes that this investment will provide significant scale and generate value creation opportunities in coming years.

“Build-out of hyper-local delivery infrastructure to impact margins in near term… This will provide significant scale and generate value creation opportunities in coming years,” the company said in its investor presentation alongside Q1 FY27 results.

Doubling down on quick commerce, Reliance Retail said that its four-hour apparel delivery service, called Ajio Rush, saw 136% quarter-on-quarter (QoQ) order growth in Q1 FY27. 

Meanwhile, digital commerce arm JioMart also continued to scale its two-hour apparel and electronics deliveries to 5,500 pincodes across the country.

“JioMart maintained growth momentum across key metrics with platform servicing ~5,500 pin codes with 2,500+ digital and fashion & lifestyle stores connected to two-hour delivery,” added the retail juggernaut. 

In a statement alongside its Q4 FY26 results, RRVL also said that JioMart clocked a 116% YoY jump in online grocery orders during the quarter, contributing 13.4%, up 160 bps YoY, to the company’s D2C grocery revenues. The company did not disclose the total number of orders.

The retail giant also said that Jiomart’s active seller base grew 26% YoY, adding that the platform’s operating focus continues to be on repeat customers, order density, availability, delivery cost and contribution margin.

“… Our continued investment in digital commerce underscores the transformative power of our digital platforms. Our expanding customer base, widest store network, and growing omnichannel capabilities position us well to continue fulfilling every need, every dream, for every Indian, every day,” said RRVL executive director Isha Ambani.

That said, the company didn’t offer clarity on how much the digital and new commerce businesses contributed to Reliance Retail’s total revenue in Q1 FY27. However, RRVL said that digital commerce contributed 27.3% to apparel and footwear revenues, up 490 bps YoY.

Meanwhile, Reliance said that JioHotstar reported its highest-ever average monthly active users (MAUs) of 530 Mn during the quarter, up 15% YoY, on the back of strong uptick in viewership across sports and entertainment. It also said that IPL 2026 saw a record 700 Mn viewers across the digital format.

On its newly launched microdrama vertical Tadka, Reliance noted that the platform crossed 100 Mn active users within two months of launch, adding that daily watchtime per viewer rose 5X since launch.

Meanwhile, RIL’s digital arm Jio Platforms saw its consolidated net profit rise 9.2% YoY to ₹7,764 Cr in Q1 FY27, while the IPO-bound platform’s operating revenue increased 11.8% YoY to ₹39,173 Cr. 

Overall, RIL’s net profit for the quarter increased 5.7% YoY to ₹23,001 Cr while gross revenue rose 24.5% YoY to ₹3.40 Lakh Cr.

Shares of RIL ended yesterday’s trading session 2.59% higher at ₹1,326.5 on the BSE.

The post Reliance Retail’s EBITDA Erodes In Q1 Amid Q-Comm Expansion appeared first on Inc42 Media.