Retail to drive Reliance Industries’ pre-tax profit growth over 10 years

A Goldman Sachs report says, the retail sector including e-commerce will drive Reliance Industries’ 10x growth in pre-tax profit over the next decade. Growth in the company’s retail revenue paused in FY21 after growing 5x over FY16-FY20 mainly due to COVID related macro headwinds including lower footfalls.

The oil-to-telecom conglomerate focused on building its digital capabilities during this period besides expanding physical reach.

Goldman Sachs expects Reliance’s core retail revenue to grow at a 36 per cent CAGR over the next four years to $44 billion and e-commerce revenues to grow to 35 per cent of total retail revenues in FY25.

Analyst also predicts the company’s market share in online grocery segment will grow to 50 per cent by FY25 while its share in overall e-commerce is expected to grow to 30 per cent. RIL’s core EBITDA is expected to grow by 59 per cent year-on-year in FY22E based on cyclical growth in the oil-to-chemical (O2C) business, and structural growth in the consumer businesses.