Consumer, technology led growth is really the way: RIL
New Delhi, July 31 (IANS) Consumer and technology led growth is really the way, Reliance Industries Limited (RIL) said in a post earnings call with a clear focus on innovation and intellectual property led technology platforms.
“Clearly for us consumer and technology led growth is really the way. We see ourselves with a clear focus on innovation and intellectual property led technology platforms. That is really the drivers for our growth,” said V. Srikanth, Joint CFO, Reliance Industries Limited.
“We are ready to launch 5G services in India and we are focusing a lot on building Jio Platforms across a variety of business cases. The second part on the retail side is scaling up of JioMart as well as store openings and that is something that you will see aggressively over this year too. And then the focus on providing convenience as well as a very superior shopping experience to consumers is something that we are very focused on,” he added.
On the O2C segment, “We are poised to benefit from demand and margin recovery as it happens, and as we continue to focus on cost management measures to further enhance our competitiveness. In O2C, as mentioned in the AGM by our chairman, the focus is on proprietary O2C technology and on really building a new energy and new materials business,” he added.
In the aggregate EBITDA numbers at Rs 21,585 crore the year-on-year fall is only about 11.8 per cent. O2C business profitability was affected by demand and margin contraction and higher utilisation and flexible product placement helped reduce the impact, he added. “But even then, if you were to look at it in totality, it was down about 40 per cent. Retail operations, was disrupted with shutdown of electronics and the most profitable fashion and lifestyle stores, but it was offset by strong grocery growth,” he added.
Kiran Thomas of Jio Platforms said at the call that to offer wireline services through fibre-to-home technologies, work is going on now in the top 1,600 cities, which would obviously address not just homes but also small and medium businesses and large enterprises.
“So that is the next frontier. You already have a critical mass of homes and businesses who are already connected on fibre,” he added.
“Obviously, all of this, we are doing in such a manner that if a customer already has a 4G LTE connection, and they are also signing up for wireline services, there are a number of areas where these two technologies work very well together,” he added.
“For those of you who may not have the context, Jio Platforms Limited has been created in the express purpose to develop our own intellectual property and our own homegrown solutions which initially can be used to support the RIL growth businesses, whether that be in telecom, whether that be in retail, financial services, education, healthcare, agriculture, or even manufacturing,” he added.
“So more and more you will see our financial services step out into the open market as well. And again we have work underway where we are establishing solutions focused on health, education, Internet of Things and so on as we extend our relationship, both with mobile customers as we head into the home with our Jiofiber initiative,” he added.
Dinesh Thapar of Reliance Retail said that consumer electronics and particularly fashion and lifestyle have been hit the hardest because they were not classified to be essential items.
Therefore, right through April and for a major part of May business was really suspended, he added.
“Grocery whilst it continued operations, did so with limitations. There were limitations on operating hours, the days on which they could operate, the number of people who can be in store… so really operations with limitations, and therefore creating logistical challenges as well,” he added.
“In the continuing businesses, fundamentally, we had 21% growth – a 20% plus growth on grocery and connectivity which functioned for the most part of the quarter although grocery with some limitation. Grocery grew 5% so we had growth despite constraints,” he said.
On the way forward, he said, “We continue to remain very focused on scaling up digital commerce activity orders across all the platforms that we have JioMart – clearly the foremost of all, on AJIO, on Reliance Digital, on Relaince Jewels.net… so all of them,” he said.
Offline expansion will continue just taking a little bit of a pause given the suspension of activity in the last few months. “But as business starts to come back as operations starts to resume, we’ll get back to expansion of stores and we’ll get back to expanding our supply chain infrastructure in keeping with the ambition and aspiration that we have and we will continue to expand our partnerships with kiranas, merchants farmers, vendors in keeping with the broad ambition that we have for the retail business,” he added.
Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Ltd said, “We’ve completed our fund raise and partner induction program. We raised Rs 1,52,000 crore from 13 investors, post this the stake of Reliance Industries is at 66.48%. Of the funds raised, we are retaining roughly Rs 23,000 crore in JPL while rest is being used to redeem the OCPS investment that RIL had in JPL.”
On the operational front, he said it was a reasonably good quarter given the circumstances with second half of March and most of April being completely locked down.
“We still managed to add 15 million customer, gross adds during the quarter, net add of 9.9 million closes to 10 million during the quarter. Things have improved in last few weeks as the lockdown has been eased. And we can clearly see the pent-up demand, but of course the impact continues. We have seen an impact on the customer addition but picking up pace again,” he added.
–IANS
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