NEW DELHI: Orkla India, the listed maker of MTR foods and Eastern spices, is gearing up for its next phase of growth with a cash-rich balance sheet to fund acquisitions, even as it pivots towards convenience foods and digital channels—moves that could stretch its traditional operating model.
“We are a cash-generating company. We generate anything between ₹300-400 crore annually… money is not a constraint," Sanjay Sharma, managing director and chief executive officer at Orkla India, said in an interview with Mint.
The debt-free company is evaluating partnerships and buyouts of regional brands as it looks to expand beyond its southern stronghold.
Shift in focus
The push comes as Orkla works to stabilize performance after its listing in November last year, part of its parent’s strategy to create independent portfolio companies and drive local value creation. A key priority is to demonstrate that model to public market investors and return to steady double-digit growth, Sharma said.
The business has expanded in phases since the Norwegian parent entered India in 2007. It scaled up with the acquisition of Eastern Condiments in 2021, which doubled its size and strengthened its position in packaged foods, as it chases a market that research firm IMARC Group estimated at $129.2 billion in 2025 and projects to reach $238.8 billion by 2034 at a CAGR of 6.24%.
Spices account for about 67% of revenue, leaving the company reliant on a deeply localized category. It is now reorganizing its portfolio around three consumption occasions—breakfast, main meals and desserts—to deepen its play in convenience foods.
“We are trying to build three key platforms which we believe are the most important platforms of a meal,” Sharma said.
A central part of this shift is moving beyond powder formats into ready-to-use and ready-to-eat products. In breakfast, the company has expanded from dosa and idli mixes to a wet batter platform, piloted in Bengaluru where it has emerged as the number two player. It plans to take the model to other cities after stabilizing operations that require cold chain infrastructure and local manufacturing.
“The most important element for us was profitability. We are not a startup where we want to lose money to build something,” Sharma said.
Industry experts, however, point out that this shift could pose execution challenges.
“Orkla was well placed to tap the ready-to-cook and ready-to-eat segment, given its strong base with MTR mixes, and has scaled that well across channels. But the larger challenge is that spices and regional foods remain highly localised, which makes national expansion harder,” KS Narayanan, a food industry expert, told Mint.
Narayanan added that moving into fresh categories could test the company’s operating model. “The company’s strength lies in shelf-stable products with longer life cycles. Moving into fresh categories like wet batter requires a very different operating model and supply chain, which is not easy to build or scale.”
Quick commerce drives distribution shift
The shift is also visible in desserts, where the company has moved from powder-based mixes such as gulab jamun to ready-to-eat offerings, a segment that delivered strong growth last year. This is being supported by changes in distribution, with quick commerce contributing about 9.5% of total sales and expanding rapidly.
“This channel continued to grow at 40% relentlessly year after year,” Sharma said, adding that it caters to a more affluent consumer base that values convenience.
Quick commerce is also reshaping product rollouts, allowing the company to test launches in specific cities using digital media before scaling through e-commerce and modern trade, rather than relying on nationwide general trade launches.
At the same time, the company is experimenting with direct-to-consumer channels in response to rising costs on quick commerce platforms. “The kind of money that they ask for, I think it’s better for us to go to D2C,” Sharma said.
Recent launches include “Wok and Roll”, a range of Asian pastes and powders, and “MTR Prakriti”, a premium single-origin spices portfolio with region-specific variants such as Byadgi chilli and Araku turmeric.
Costs, margins in focus
On the macro front, the company expects inflation to return in key commodities after an unusual two-year period of deflation. “We have never seen two years of deflation,” Sharma said, calling it a “black swan” event.
Prices of chilli have risen sharply due to lower acreage, and the company expects to pass on increases while maintaining a narrow premium over unbranded products, which account for about 60% of the market. During the deflation phase, it prioritized volume growth over value, with volumes rising about 7% over the past nine months, led by faster growth in spices that outpaced broader FMCG trends.
Margins remain strong, with Ebitda margin at about 17.2% in the nine months ended December. Orkla India reported revenue from operations of ₹624 crore for the quarter ended December (Q3FY26), up from ₹604.6 crore a year earlier, while profit declined to ₹55.1 crore during the period from ₹65 crore.
Orkla will pursue acquisitions, premiumization and digital distribution to scale nationally, even as it continues to describe itself as a regional player. “We are very clear on our strategy,” Sharma said. “A good run of double-digit growth over the next five years will put us in a very good space.”