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Indian apparel retailer Aditya Birla Fashion and Retail Ltd reported a steep 92% drop in third-quarter profit on Tuesday, hurt by soaring marketing expenses.

Consolidated net profit plunged to 157.9 million rupees ($1.91 million) for the three months that ended Dec. 31 from 1.89 billion rupees a year earlier.

The company cited "accelerated marketing investments" amid a rebound from pandemic lows.

The retailer, which houses brands such as Allen Solly, Pantaloons and Van Heusen, said the quarter was hit by a more than two-fold jump in marketing and strategic investments in new ventures. Total expenses rose more than 31% to 36.02 billion rupees, outpacing a nearly 20% rise in revenue from operations to 35.89 billion rupees.

The Aditya Birla Group unit and the rival Reliance Retail, owned by billionaire Mukesh Ambani's Reliance Industries Ltd, have been on a shopping spree for premium brands in the past few years as they competed for a larger share of India's fashion market.

Last month, Reliance Retail reported a 17% jump in quarterly revenue.

The Birla group company has been investing heavily to build its store presence by partnering with several local and international brands such as high-end wedding wear label Sabyasachi, French luxury retailer Galeries Lafayette and emerging local names Bewakoof and BerryLush.

Meanwhile, sales at its Madura Fashion and Lifestyle unit more than doubled. Revenue from the Pantaloons business, which the group bought from Future Group, rose about 8.7%.

Pantaloons was hit by sluggish growth in smaller towns, "transient" inflationary pressures in the value segment and a slip in sales after the Hindu festival of Diwali mid-November, the company said in an investor presentation.

Shares of Aditya Birla Fashion and Retail were down 1.6% in afternoon trading on Tuesday.

($1 = 82.6730 Indian rupees)