Reliance Retail’s stock falls 10% as third quarter net profit falls 97% to Rs 14 lakh

Shares of Reliance Retail-owned Lotus Chocolate Company fell 10% to end the January 13 session at Rs 677 after the company’s net profit took a massive 97% hit in the third quarter of FY26.The company’s net profit stood at Rs 14 lakh, down 96% year-on-year, Lotus said in a filing with the regulator. In the same quarter last year, the company reported a net profit of Rs 3.72 crore.

Lotus reported revenue from operations of Rs 142 crore for the quarter under review, down 14% from Rs 165 crore in the corresponding quarter of the previous fiscal.

On the other hand, EBITDA margin saw a marginal increase of 20 basis points to 4%. One percent (1%) is equal to 100 basis points (bps). EBITDA is earnings before interest, taxes, depreciation and amortization.

“Amid increased commodity price volatility, Lotus has been actively hedging its exposure to commodity price dislocations to limit downside risk. Despite operating at an adverse stage of the commodity cycle and a tight liquidity environment, the company delivered PBT of Rs 53 lakh for the quarter, compared to Rs 3.7 Crore in Q3 FY25. The company continued to focus on margin protection during the period,” the company said in a stock exchange filing.

As part of its longer-term growth plans, the company is also undertaking a phased modernization of its existing facilities and machinery following a detailed assessment. While these initiatives are intended to give the company an edge in the festival-driven demand season, limited and planned production disruptions could negatively impact performance in the short term. Over time, increased contribution from consumer brands is expected to support structurally higher margins, reduce exposure to commodity cycles and strengthen the company’s competitive position and shareholder returns.

Following early validation of its consumer business in select regions this year, Lotus Chocolate Company is now focused on scaling its B2C consumer franchise. This marks a shift from a largely commodity-based model for cocoa ingredients to a more consumer-centric approach with higher added value. The integrated cocoa-to-consumer model is expected to increase resilience, profitability and visibility in the medium term.(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)