The core offline revenue of Reliance Retail is expected to grow at 16 per cent CAGR over the next five years. As per Jefferies analysts, this growth will be driven by fashion and grocery segments.
Within offline segments, fashion is likely to grow at 24 per cent CAGR followed by grocery at 19 per cent CAGR and electronics at 11 per cent. The non-core connectivity segment is likely to grow at 18 per cent CAGR.
Jefferies also expects Reliance Retail to aggressively ramp-up its e-commerce business with B2C gross merchandise value of $15 billion and B2B gross merchandise value (GMV) of $3 billion by FY25. It forecast revenue CAGR of 21 per cent y-o-y over FY20-25E. It estimates the company’s online presence to help it capture 13-14 per cent of the e-commerce market share by FY25.
Analysts believe, an unfavorable verdict on the Reliance-Future Group deal could benefit competitors and the company could lose a potential upside from the vast retail store network and supply-chain capabilities of Future Group.
So far, the company’s diversified portfolio, spanning electronics, fashion and food and grocery across online and offline has helped the retailer cushion the impact of COVID-19.