Mukesh Ambani-Backed Lotus Chocolate Stock Soars 400% in Just 4 Months, Delivers 5,062% Returns in 3 Years

Investing in the stock market can be highly rewarding if you choose the right stocks, but it also comes with risks. However, for shareholders of Lotus Chocolate Company, there is plenty to celebrate. The stock of this Mukesh Ambani-backed company has delivered massive returns over the years.

The share price of Lotus Chocolate has surged by an incredible 5,062%, jumping from ₹35 in September 2020 to ₹1,807 now. A large part of these gains occurred in the past four months, with the stock rising by 404%. This surge began after Reliance Consumer Products (RCPL), part of Reliance Retail Ventures (RRVL), bought a 51% stake in the company in March 2023 for ₹74 crore.

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Reliance Retail Ventures, led by Mukesh Ambani, is the parent company of all Reliance group retail businesses.

About Lotus Chocolate

Lotus Chocolate is one of the top manufacturers of high-quality chocolates, cocoa products, and cocoa-based ingredients in India. Its products are supplied to a wide range of customers, from local bakeries to big multinational companies.

The chocolate and confectionery industry in India is worth over ₹25,000 crore, with chocolate making up about two-thirds of the market and confectionery covering the remaining one-third. The industry is expected to grow to ₹35,000 crore in the next four years, with a 10% annual growth rate.

Most of the chocolate market is dominated by international brands like Mondelez, Nestlé, Ferrero, and Mars, which control 85% of the market. However, Indian companies like Amul are starting to gain ground.

Company’s Strategy

Lotus Chocolate sees a big opportunity in offering high-quality chocolate at affordable prices, especially as premium chocolate brands dominate the market. The company’s focus is on creating a strong brand that offers value to consumers.

In the business-to-business (B2B) market, there’s also great potential due to the increasing popularity of home baking and the growing demand for chocolate-based products. The company plans to tap into these opportunities, particularly in retail and the HoReCa (Hotels, Restaurants, and Cafés) sector.

However, rising global cocoa prices have pushed up production costs, which may continue in the future. This could lead to higher consumer prices and possibly affect the volume of sales, but the company remains optimistic about overall value growth.

Lotus Chocolate is focused on strengthening its B2B operations while also expanding its business-to-consumer (B2C) presence. The company is using a multi-channel approach to distribution and aims to offer a wide range of products across different categories.