Reliance Retail Ltd’s phenomenal growth is well- known and has done more than its bit to impress parent Reliance Industries Ltd’s (RIL’s) investors. We wrote here how the retail business was the single largest driver of RIL’s valuations in the past year. In fact, just last week, on 1 April, the RIL stock touched a 52-week high on the National Stock Exchange, in keeping with the buoyant mood in the broader markets.

But, of course, given that the detailed profit and loss account of the retail business is unavailable, many details are still coming to light. For instance, the company’s earnings presentation does not reveal the contribution from JioPhone sales, included in retail revenues. However, Kotak Institutional Equities estimates revenues from Reliance Jio recharges, JioPhone (and other Jio-related devices) sales and petroleum retailing have brought about 54% to overall retail revenue in the trailing four quarters.

“We note that device sales may form around one-third of revenue from the consumer electronics segment over the past four quarters and, thereby, explain a portion of strong growth delivered by the company," said Kotak in a report on 29 March. The chart above has the details. The consumer electronics segment constitutes about 30% of the retail business revenue.

However, it’s difficult to accurately carve out the Ebitda margin of just JioPhone device sales. Ebitda is earnings before interest, tax, depreciation and amortization. Of course, from a valuation perspective, Ebitda would be far more relevant.

The retail business revenue growth is being driven by the low-margin telecom segment. Overall margins have improved, thanks to the sheer scale of the expansion. According to RIL’s December quarter earnings presentation, the overall retail Ebitda margin was 4.7%. This has risen from 3.2% in the same period last year. This includes Jio recharges and fuel retailing.

In its core retail business, Ebitda margin for the December quarter stood at 7.2% compared to 6.1% a year ago. Core retail includes grocery, consumer electronics, and fashion and lifestyle.

Once again, when the March quarter results are announced, investor focus will be on RIL’s consumer businesses: Reliance Retail and Reliance Jio. After all, refining margins are nothing to write home about. Meaningful refining capacity additions are expected this year and demand growth outlook for refined products isn’t that bright.

“Reliance Retail will see a bumper quarter this time around, much better than other retailers," said an analyst requesting anonymity.

“We are witnessing even higher aggression from Reliance Retail as seen from the increased advertising on television for its retail formats (Reliance Digital and Ajio.com) and very strong store expansion," Jefferies India Pvt. Ltd’s analysts noted in a report on 1 April.

Investors have no reason to complain. Returns in FY19 have topped 50%. Based on Bloomberg data, the RIL stock trades at 20 times estimated earnings for FY20, suggesting a larger proportion of the brighter picture has been factored into the price.

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