Totally agree, and I’m not trying to say this is new as the top-level management was replaced by Reliance’s employees long back but just that the replacement consistency is making it better. Yes, it might or might not be a big hit but at the small base at which Lotus currently operates even a small rack in every Reliance Retail store would be enough to 10x their EPS. Campa-Cola is a great example and let’s not forget the Acquisition of Metro Cash&Carry which is primarily a B2B kind of business and Metro’s HORECA can be a great channel for Lotus to make its chocolate compounds available to Restaurants.
The Huge Jumps in Quarterly numbers are decent enough evidence of how things are better than before and I do hope this doesn’t end up in the failed acquisitions list of Reliance.
Edit - Seems like some small online sales have begun. Just Came across this site, can help us gauge the segment Lotus is currently operating in.
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I just read the vp thread of Lotus. I think lotus price has run ahead of the earnings. It will take some time before the valuation and earnings catch up before the next leg of rally.
In Lotus I’m sure earnings will grow. But on mcap/(2 X H1FY25 PAT) pe comes north of 50. So I think it will be a wait and watch as it takes some time valuation and earnings to catch up. I haven’t made any money using high pe stocks.
Any idea why there was a qoq degrowth in Q2 compared to Q1? Also is there any seasonality in the Business like a particular quarter is best?
Disclosure: studying
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Why they haven’t yet published the FY25 Q2 Financials. Aren’t they quite late for the same?
They have. Screener is not showing it.
Screener is showing it, check standalone numbers.
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Another sign of a positive change, seems like the company has hired a dedicated social media manager/designer the posts have significantly improved -
Signaling their interest in B2C segment.
Edit - Seems like the products might soon be available on Quick Commerce platforms too.
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Cocoa prices were high in apr-june quarter and coming down in july -sep quarter.so expecting better margins in Q2.Also comparing the premium chocolates from ITC, I think the transformation towards retail has not started.so expecting tailwinds from that.even the website is old and no new products for retail.in AR they have mentioned retail push through reliance outlets
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Finally, early signs of exponential growth. My Investment thesis was always linked to Lotus reaching the shelves of Reliance Retail stores, because just making it to the shelves of Reliance can act as an catalyst for multi channel sales leading to an easy 4-5x of sales.
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Very Poor results but does it have to do with company trying to do some essential structural changes ? Also, the expenses seem to be increasing due to marketing and fueling it’s new B2C channel.
Came across these photos clicked at one of Arijit Singh’s concerts, posted by a Head Chef at Lotus. An essential thing to note here is the Revival of Brands like Toffeeman and Ravalgaon.
What do you think the response will be like when these products hit the shelves of Reliance Smart stores and Jio Mart ? I think they should have done this before the Festive season kicked off.
Disclosure - Invested
Just checked, the products are up for sale on Jio Mart, which means that their products have begun to reach Reliance Stores.
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How can we check if these brands are owned by Lotus chocolate?
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The stock has seen significant correction from high. Is this just the results effect or any red signs for this sort of correction?
Disc: Tracking
After all its a commodity business unless they move up the value chain & establishes a reputed chocolate brand of its own.
Than only it will be margin accretive.
The high price was never justified. May be it went up, because of its parent backing which is ‘RELIANCE’. But how long can that sustain if its not converted into growing results.
2nd is, being a commodity business, it depend heavily on cocoa as raw material. Any price fluctuations there, & it would further compress their margins. Cocoa prices just started to fall from last quarter. from 2023 it rose quite sharply. Attached is the price chart.
And since India doesn’t cultivate cocoa in the volume required, we are net importers.
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