Synopsis: The shares of this FMCG stock fell 10% after the Q3 FY26 PAT result saw a 96% decline YoY due to lower revenue and profit margin. Revenue decreased by 14% YoY. Meanwhile, the current change of business from B2B to B2C and the support of the Reliance Consumer Products arm are encouraging for the company.
The shares of this company, which is a Reliance Group stock and is in the business of sourcing and processing cocoa beans to manufacture chocolates, cocoa products and cocoa derivatives, were in the news today after the company reported a negative result with a drop in several performance metrics.
With a market cap of Rs 899 crore, the shares of Lotus Chocolate Company Ltd crashed up to 10 per cent in today’s trading session and reached a low of Rs 677 when compared to its previous day’s closing price of Rs 751.65. The stock is trading at a PE of 150 compared to its industry PE of 50. 6.
Q3 FY26 Result highlights
The revenue from operations for the company stood at Rs 142.11 crore when compared to Rs 164.67 crore in Q3 FY25, falling by about 14 per cent on a YoY basis and on a QoQ basis falling by 23 per cent from Rs 183.8 crore in Q2 FY26.
The PAT fell by about 96 per cent on a YoY basis when you compare the Q3 FY26 profit at Rs 14 lakh to Rs 3.72 crore in Q3 FY25 and on a QoQ basis has fallen by 90 per cent from Rs 1.44 crore in Q2 FY26. The EBITDA is at Rs 5.67 crore at a 4% margin, whereas it was at Rs 6.29 crore at a 3.8% margin in Q3 FY25
The company’s strategic pivot
The move toward building a scaled B2C consumer franchise is strategically crucial. Beyond bulk B2B cocoa ingredients into branded consumer products, structurally enhancing this business model is improving in pricing power, stability of demand, and margin visibility.
The investments in plant modernisation, process innovation, and brand development are strengthening competitiveness in the long run and decreasing dependency on cyclical commodity dynamics. Such a pivot would place the company in a strong position to generate more predictable earnings, stronger moats, and sustainable value creation with consumer demand scaling over time.
Reliance Acquisition of the company
Reliance Consumer Products Ltd made an acquisition of 51% in the Lotus Chocolate Company in May 2023. This acquisition was done as it would help Reliance utilise the cocoa processing and chocolate manufacturing facilities of Lotus, or vice versa, and help Lotus excel in B2C through the distribution and branding resources of Reliance.
Management commentary
Mr Natarajan M Venkataraman, Whole-time Director, said, “The Company is poised to transition from a commodity-led model to a consumer-led growth engine. In pursuance of this transition, the Company is also undertaking a structured review of existing B2B customer contracts to ensure alignment with the evolving consumer-led and integrated business model.”
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