Orkla India reported a 19.4% year-on-year increase in revenue from operations to ₹776 crore in the second quarter of FY27, supported by strong demand for spices, growth in digital commerce and higher sales across domestic and international markets. Its digital commerce channel recorded 23% growth during the September quarter and contributed 10% of domestic revenue, highlighting the growing importance of online platforms in the company’s distribution strategy. The company operates popular Indian food brands, including MTR, Eastern and Rasoi Magic.
Despite the strong revenue performance, volume growth remained relatively modest at 2.9%, compared with 7.7% in the corresponding quarter last year. Profit after tax increased 19.2% to ₹91 crore, while EBITDA rose 12.6% to ₹124 crore. However, the EBITDA margin declined to 15.9% from 16.9% a year earlier because of elevated raw-material costs and spending on its Project Bolt business transformation programme. The results highlight Orkla India’s ability to grow revenue while facing pressure on underlying volumes and profitability.
Key Takeaways
- Orkla India’s Q2 FY27 revenue increased 19.4% to ₹776 crore.
- Revenue from product sales grew 18.4%.
- Digital commerce revenue increased 23% year over year.
- Digital commerce contributed 10% of domestic revenue, compared with 8.9% in Q1 FY27.
- Digital commerce grew 33.6% outside South India.
- Spices revenue increased 25.1% to ₹498 crore.
- Convenience Foods revenue rose 7.7% to ₹271 crore.
- Profit after tax increased 19.2% to ₹91 crore.
- EBITDA grew 12.6% to ₹124 crore, but its margin declined to 15.9%.
- Orkla introduced 15 new products during the quarter and 38 innovations during the first half of FY27.
Orkla India Q2 FY27 Financial Results
Orkla India delivered double-digit revenue and profit growth during the September quarter.
Revenue from operations increased to ₹776 crore from ₹650 crore in the corresponding quarter of the previous financial year.
The company’s product sales revenue grew 18.4%, while total revenue growth was supported by its spices portfolio, domestic business and international operations.
However, the difference between revenue growth and volume growth deserves attention.
Volume growth, measured by tonnage, stood at 2.9%, significantly below the 7.7% recorded in Q2 FY26.
This indicates that higher selling prices and changes in product mix contributed to revenue growth alongside the increase in quantities sold.
Q2 FY27 Financial Performance
| Financial metric | Q2 FY27 | Year-on-year growth |
|---|---|---|
| Revenue from operations | ₹776 crore | 19.4% |
| Revenue from product sales | — | 18.4% |
| Volume growth | — | 2.9% |
| EBITDA | ₹124 crore | 12.6% |
| EBITDA margin | 15.9% | Down from 16.9% |
| Profit after tax | ₹91 crore | 19.2% |
The results show that Orkla India maintained profit growth despite higher commodity expenses.
However, EBITDA increased more slowly than revenue, indicating that rising operating costs affected the company’s operating profitability.
Digital Commerce Grows 23% as Online Sales Become More Important
Digital commerce was one of the strongest growth channels for Orkla India during Q2 FY27.
Revenue from the channel increased 23% year over year, and digital commerce contributed 10% of the company’s domestic revenue.
Its contribution also increased from 8.9% in Q1 FY27.
The channel’s growth was particularly strong outside South India, where digital commerce revenue increased 33.6%.
This is strategically important because Orkla India has traditionally been particularly strong in southern Indian markets through brands such as MTR and Eastern.
Online platforms provide an opportunity to reach consumers in regions where the company’s traditional distribution network may have less penetration.
Why Is Digital Commerce Important for Orkla India?
Digital commerce includes sales generated through online marketplaces, quick-commerce platforms and other digital retail channels.
For packaged food companies, these platforms offer several advantages.
1. Access to younger consumers
Younger urban consumers increasingly use online platforms to purchase groceries, snacks, spices and convenience foods.
Orkla can use digital channels to reach these customers and introduce products to new audiences.
2. Expansion beyond traditional markets
The 33.6% growth outside South India suggests that digital commerce is helping Orkla expand beyond its established regional customer base.
3. Better product discovery
Online platforms make it easier for consumers to discover different varieties of spices, ready-to-cook products and packaged foods.
4. Faster access to new markets
Digital distribution can help companies test demand in locations where building a traditional retail network may take longer.
The 23% growth figure indicates that online distribution is becoming an increasingly important part of Orkla India’s business strategy.
Spices Business Leads Growth With 25.1% Revenue Increase
Orkla India’s spices business was the biggest contributor to its Q2 revenue growth.
The segment reported revenue of ₹498 crore, increasing 25.1% from ₹398 crore in the corresponding quarter last year.
The portfolio includes well-known brands such as MTR and Eastern.
Growth was reported across geographical markets, with Kerala also showing signs of recovery after facing pressure for several quarters.
According to managing director and CEO Sanjay Sharma, Kerala’s business has started growing faster than the company’s overall average.
This is significant because Kerala is an important market for Eastern’s spice products.
The performance suggests that Orkla is benefiting from demand across its established markets while continuing to expand into other regions.
Why Are Spices Important to Orkla India?
Spices are central to Orkla India’s packaged food business.
The category includes products such as:
- Masala and blended spices.
- Ground spices.
- Regional spice mixes.
- Packaged cooking ingredients.
- Products used in traditional Indian recipes.
These products benefit from recurring household consumption.
However, the business is also exposed to fluctuations in agricultural commodity prices, which can influence manufacturing expenses and profit margins.
Convenience Foods Revenue Increases 7.7%
Orkla India’s Convenience Foods business generated ₹271 crore in Q2 FY27, representing 7.7% growth compared with ₹252 crore a year earlier.
The category includes products such as ready-to-cook and packaged food offerings.
Its growth was slower than the spices business.
However, management attributed part of the difference to a shift in the festive calendar.
Last year, Dussehra and Diwali fell within the September quarter. In FY27, the festivals moved into the December quarter.
This means some seasonal demand that would traditionally have contributed to Q2 revenue is expected to appear in Q3 instead.
The company expects the third quarter to capture a significant portion of festive demand.
The shift in the festival calendar is therefore an important factor when comparing the two quarters.
Domestic and International Markets Both Deliver Growth
Orkla India recorded growth across domestic and international markets.
Domestic revenue increased 20% to ₹623 crore, while international revenue rose 11.7% to ₹145 crore.
| Market | Q2 FY27 revenue | Year-on-year growth |
|---|---|---|
| Domestic | ₹623 crore | 20.0% |
| International | ₹145 crore | 11.7% |
| Total | ₹768 crore | — |
Note: The segment figures are rounded and do not add exactly to reported consolidated revenue of ₹776 crore.
Domestic operations remained the largest contributor to revenue.
The company is also working to expand its presence outside South India, using digital commerce and new product launches to reach additional consumers.
International growth provides another source of diversification, although it remains smaller than the domestic business.
Rising Raw-Material Costs Put Pressure on Margins
Despite revenue growth, Orkla India continues to face elevated input costs, particularly in spices.
The company’s consumption cost index for spices stood at 1.30 in Q2 FY27, compared with 0.88 in the same quarter last year.
This represents an increase of approximately 48.2%.
The company said the comparison is partly affected by the previous year’s base, when spice prices had fallen sharply by around 30%.
As prices moved back towards earlier levels, the year-on-year increase appeared particularly high.
The company monitors crop development, sowing trends and cold-storage inventories to assess future commodity availability and price movements.
It also uses data and artificial intelligence-based models to improve its commodity-price forecasting.
How Did Higher Costs Affect Profitability?
Orkla India’s EBITDA increased 12.6% to ₹124 crore.
However, the EBITDA margin declined to 15.9% from 16.9% in Q2 FY26.
| Profitability indicator | Q2 FY27 | Q2 FY26 |
|---|---|---|
| EBITDA | ₹124 crore | ₹110 crore |
| EBITDA margin | 15.9% | 16.9% |
| Profit after tax | ₹91 crore | ₹77 crore |
The margin decline indicates that expenses increased faster than the company’s operating earnings.
Higher input costs and investments in Project Bolt contributed to the pressure.
Management expects some of this pressure to ease as recent price increases begin to flow through to revenue.
Expenses related to Project Bolt are also expected to end around November-December 2026.
Orkla Introduces 15 New Products During Q2
Product innovation is another important part of the company’s growth strategy.
Orkla India introduced 15 new products during the September quarter, taking the total number of innovations launched during the first half of FY27 to 38.
The launches are intended to address changing consumer preferences, particularly among younger customers and urban households.
Product innovation can help packaged food companies expand beyond their established categories and create additional opportunities for revenue growth.
It can also help brands respond to changing preferences around convenience, flavours, cooking habits and food consumption.
For Orkla, the challenge is to develop products that can achieve repeat purchases rather than relying only on initial consumer interest.
Orkla India Reports 15.1% Revenue Growth in H1 FY27
The company’s performance during the first half of FY27 also remained positive.
Revenue from operations increased 15.1% to ₹1,435 crore compared with ₹1,247 crore in the first half of FY26.
However, volume growth was only 2.3%, compared with 8% during the corresponding period last year.
| Financial metric | H1 FY27 | Year-on-year growth |
|---|---|---|
| Revenue from operations | ₹1,435 crore | 15.1% |
| EBITDA | ₹239 crore | 7.8% |
| Profit after tax before exceptional items, net of tax | ₹178 crore | 14.4% |
| Volume growth | — | 2.3% |
The company’s first-half EBITDA margin declined to 16.6% from 17.8%.
This reinforces the importance of input-cost management and volume recovery for the remainder of the financial year.
What Management Expects in the Coming Quarters
Managing director and CEO Sanjay Sharma said the company’s focus remains on improving volume growth while expanding its presence across India.
Management expects the December quarter to benefit from festive activity shifting out of the September quarter.
It also expects some margin pressure to ease as price increases begin contributing more meaningfully to revenue.
The expected completion of Project Bolt-related expenses around November-December could provide additional relief.
However, the company’s ability to improve profitability will depend on several factors:
- Stability in spice and agricultural commodity prices.
- Recovery in sales volumes.
- Continued growth in digital commerce.
- Better performance in convenience foods.
- Successful product launches.
- Expansion beyond traditional South Indian markets.
Orkla has also indicated that it is actively evaluating acquisition opportunities in the spices and convenience foods categories.
The company is particularly interested in established brands that hold leading positions in their markets and have potential to expand.
The Bigger Picture
Orkla India’s Q2 FY27 results demonstrate how digital commerce and regional expansion are becoming increasingly important for established Indian food brands. The 23% growth in online sales and the 33.6% expansion outside South India suggest that digital distribution is helping the company reach consumers beyond its traditional markets. Strong growth in spices, particularly through MTR and Eastern, also highlights the continuing importance of its core food categories.
However, the gap between revenue growth and volume growth remains an important concern. Higher prices and product mix supported revenue, but the company’s 2.9% quarterly volume growth indicates that underlying demand still needs improvement. Rising commodity costs also reduced EBITDA margins. Orkla’s next challenge will be to convert digital expansion and product innovation into stronger sales volumes while controlling input expenses and improving profitability.
Frequently Asked Questions
1. What was Orkla India’s revenue in Q2 FY27?
Orkla India reported revenue from operations of ₹776 crore in Q2 FY27, representing 19.4% growth compared with the same quarter last year.
2. How much did Orkla India’s digital commerce business grow?
Digital commerce revenue increased 23% year over year during Q2 FY27 and contributed 10% of domestic revenue.
3. How much did digital commerce grow outside South India?
The company’s digital commerce channel recorded 33.6% growth outside South India.
4. Which business segment performed best?
The spices business was the strongest performer, with revenue increasing 25.1% to ₹498 crore.
5. What was Orkla India’s profit in Q2 FY27?
Profit after tax increased 19.2% to approximately ₹91 crore.
6. Why did Orkla India’s EBITDA margin decline?
The EBITDA margin fell to 15.9% from 16.9% because of elevated input costs and expenses related to the Project Bolt transformation programme.
7. How many new products did Orkla launch?
The company introduced 15 products during Q2 FY27, taking its first-half product innovations to 38.
8. What are Orkla India’s major brands?
Orkla India operates food brands including MTR, Eastern and Rasoi Magic, with products across spices and convenience foods.
9. What is Project Bolt?
Project Bolt is Orkla India’s business transformation programme. Expenses associated with the programme contributed to margin pressure during Q2 FY27, and management expects these expenses to end around November-December 2026.
10. Is Orkla India planning acquisitions?
Yes. Management has said it is actively evaluating acquisition opportunities in spices and convenience foods, particularly established brands with leading positions and growth potential.
Looking Ahead
Orkla India’s performance in the coming quarters will depend on whether it can convert its digital commerce expansion and product innovation into stronger underlying volume growth. The company expects festive demand to support Q3 revenue, while recent pricing actions could help offset elevated commodity costs. The expected completion of Project Bolt expenses could also provide some relief to operating margins.
Over the longer term, expanding beyond South India, strengthening its digital distribution network and developing new food products could help Orkla India reach a wider consumer base. Potential acquisitions may further expand its presence in spices and convenience foods. However, sustainable growth will require the company to improve sales volumes, manage raw-material costs and protect profitability while competing in India’s increasingly crowded packaged food market.
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