The outbreak of COVID-19 pandemic and the ensuing lockdown and operating restrictions imposed across the country affected business operations during the year. Due to which revenues were lower in FY21 as compared to FY20.

Reliance Retail delivered revenue of Rs 1,55,209 crore against Rs 1,60,965 crore for the previous year. The revenues were impacted on account of store closures (80% stores operational), lower footfalls (65% of last year) and operational disruptions through the year.

The gradual decrease in profit after tax is primarily because in FY21, only 80% of stores were operational due to COVID-19, lockdown and operating restrictions. The revenue fell by 5% when compared with the previous year. The company had increased their employee benefit expense by 32% as a measure for COVID relief and a 30% increase in depreciation, which was a result of the net addition of intangible assets to increase its operating efficiency as with new commerce initiative, Reliance Retail is linking producers with small merchants and consumers to create a win-win partnership model. The new commerce footprint is being expanded from 33 cities at present, with investments in supply chain and technology, to make Reliance Retail a trusted partner for millions of merchants across the country, reducing the net profit of the company altogether for FY21.

The outbreak of COVID-19 pandemic and the ensuing lockdown and operating restrictions imposed across the country affected business operations during the year due to which revenues were lower in FY21 as compared to FY20 although a steady decline in the expenses have been the positive contributor towards the net Income but wasn't enough to compensate for the decline in revenue, hence the EPS growth declined in FY21. 

In FY21, the company had grown its equity by 39% from the previous year, which was a result of growth in reserves and surplus by 300%, retained earnings by 40%, and other equity by 24% compared with FY20. The primary reason for the increase in the equity is that the company had raised funds by giving 8.5% optionally convertible preference shares to raise Rs 2,400 Cr, and the rise in the retained earnings of the company, in absolute value of Rs 4,598 Cr, increasing the overall book value of the company by Rs 7,193 Cr.

A decrease in sales (organised retail by 18% and petro-retail products by 61%) has resulted in a decrease in EBITDA . The company had paid more to their employees as COVID relief but the total expenses for FY21 had fallen by 5% from the previous year FY20. For FY21, the company's revenue per unit of spending has grown. This indicates that, in comparison to the previous year, the company was less efficient in generating income with its expenses resulted in further decline of EBITDA. The Company delivered a consolidated EBITDA of  Rs 8,373 crore for FY21 against Rs 9,518 crore for the previous year, driven by the gradual rebound of revenue streams.

The company's EBITDA decreased by 12%, but its EBIT decreased by 17%, owing mostly to a 30% increase in depreciation. The corporation had grown its intangible assets, resulting in a greater depreciation amount. Intangible asset depreciation was Rs 245 crore in FY20, compared to Rs 458 crore in FY21.

The gradual increase in the asset base is primarily due to the increase in the capital-work-in-progress, for implementation of new business initiatives (such as the launch of physical store expansion and opened 1432 stores across Digital and Jio stores, investment in software development, etc. to support the expansion plans. Total store count now stood at 12178 stores, covering 31.9 million sq. ft. at the end of the year.

Changes in the working capital have reduced the cash flow from operation. Receivables and inventories have gone up from the previous year because of very weak sales and excess inventory. It may indicate a problem with the goods being offered for sale and on a credit basis.