Reliance targets to get 40 % of Revenue from Its Retail and Telecommunication Ventures

Reliance Industries Limited (RIL) is the country’s biggest energy giant. Nearly 97percent of the company’s revenue arrives from its petrochemical venture. This year, MukeshAmbani is focusing to expand its retail and telecommunication ventures too. He is expecting to increase the share of his group’s revenue from Reliance Retail and Reliance JioInfocomm to as much as 40 percent from the current contribution.

In the previous financial year that ended on March 31, a total of $70 billion revenue was obtained from RIL’s refining, petrochemicals and natural gas exploration businesses. The company is now looking in the direction to capture the emerging markets and raising levels of income in the country. “Reliance is seeking to benefit from growing consumerism in India. It is important for Reliance to diversify into unrelated businesses so it can hedge its risks and avoid possible crisis in the future,” said R.K.Gupta, Managing Director of Taurus Asset Management Ltd.

Reliance will soon launch its 4G services to tap business from middle-class consumers that PricewaterCoopers predicts will reach a number of 570 million users by 2021.MukeshAmbani’s vision to focus on other businesses sets him apart from other global energy giants. For a smooth and successful launch of its 4G services across the country, JioInfocomm is leaving no stone unturned. It has signed deals with technology companies, service and infrastructure providers and device manufacturers. “Telecom has always been the pampered baby for MukeshAmbani and his father before him. The company has previous experience in telecom and investing their large cash in businesses that will improve the return on equity, even if on unrelated business, is welcome,” said K.K Mital, a New-Delhi based fund manager with Globe Capital Market Ltd.

Apart from this, Ambani is also focused on its retail business which deals in grocery stores, hypermarkets, jewellery, electronic goods and many other specialized store formats. In the annual report, Ambani mentioned that he is expecting a fivefold increase in retail sales. Currently, Reliance operates 1,450 outlets across 129 cities in the country. The market estimation is that it will grow twice to $850 billion by 2020 from $435 billion in 2010. Reliance Retail is expanding its fleet by capturing consumers in tier-2 and teir-3 cities by giving them a world class shopping experience.

RIL is sprinting to achieve the same success of energy sector in retail and telecommunication sectors.

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