ORKLAINDIA

India's economic growth is projected at approximately 7%, supported by government initiatives like GST 2.0 reductions, which now cover 100% of Orkla's products in the 5% bracket. While the Convenience Food portfolio experienced manageable inflation in wheat and SMP, the spices category faced two consecutive years of deflation, with prices reducing over 30% and chili by 50%. However, early indicators suggest an inflationary trend in spices for the coming year, with price effects expected in Q4 FY26 and Q1 FY27.

Orkla India delivered a 4.1% revenue growth to ₹636 crores, underpinned by a healthy 5.4% underlying volume increase. EBITDA grew significantly by 17.7% to ₹102 crores, achieving a 16.1% margin. This performance was driven by volume-led growth, lower advertising spend due to festive shifts, and operational efficiencies. Excluding production-linked incentives, EBITDA growth would have been 23.2%. PAT before exceptional item^📎s grew 3.8% to ₹68 crores, but a one-time^📎 gratuity expense of ₹15.8 crores led to a 14% negative PAT after exceptional item^📎s.

The spices portfolio demonstrated robust 10.1% volume growth, despite revenue growth being a modest 3.1% due to deflationary raw material prices, leading to a 7% lower price realization in pure spices. Strategic learnings from the Eastern acquisition enabled MTR to effectively enter and grow in the pure spices category, doubling MTR's volumes in Karnataka and Andhra Pradesh. Penetration in Karnataka increased from 20.3% in 2022 to 30.6% in 2025, and in Andhra Pradesh from 4.3% to 13% over the same period.

The Convenience Foods portfolio grew 6% in revenue, with strong double-digit growth in the breakfast and meals segments. The sweets portfolio saw a temporary decline due to the festival season shifting to the prior quarter, though ready-to-eat sweets grew 47.5% over the combined festive season. MTR expanded its distribution by adding 22,000 outlets in Karnataka and Andhra Pradesh, and rural infrastructure was strengthened with 53 new distributors, reaching over 5,000 new villages.

International operations contributed approximately 21% to consolidated revenues, growing 8.7% YoY in Q3 FY26, primarily led by GCC markets (16.4% growth). The strategy involves transforming Eastern's offerings from pure spices to a total food brand for Malayali consumers and launching Arabic masalas for local populations. Digital commerce continued its strong trajectory, growing 43.4% YoY and now accounts for 9.5% of total sales, with initiatives like MTR Prakriti targeting affluent young consumers through a dedicated D2C site.

The company's sustained focus on operational efficiencies and lower advertising spend contributed to the strong EBITDA margin. Management expressed confidence in an improved top-line performance, strong volume development, and a turning deflationary cycle in spices. They highlighted a long runway for growth in South India, citing high per capita income and packaged food consumption. Future growth pillars include deepening penetration in core markets, expanding convenience foods through e-commerce, and strengthening international business, particularly in GCC and US markets.