Revenue growth stayed strong, but Orkla India's margin slipped again
Costs grew faster than revenue in Q2FY27, while spices growth and pricing actions supported the consolidated performance.
Filed 04 Nov 2026, 16:08 IST · after market close · Orkla India Ltd (ORKLAINDIA)
Key takeaways
- Consolidated revenue grew 19.36% YoY, but expenses rose 19.60%, leaving operating margin down 0.17 percentage points.
- Spices grew 25.1% YoY, while management said strategic pricing helped mitigate cost pressures.
- Net profit rose 19.22% YoY to Rs 91.42 cr, with other income contributing 8.83% of pre-tax profit.
Price around the results
Revenue growth accelerated, but profit growth was less even
In consolidated Q2FY27, revenue grew 19.36% YoY and 17.76% QoQ, while net profit increased 19.22% YoY and 4.24% QoQ. Sequentially, operating profit grew 11.80%, but profit before tax rose only 4.20% as other income fell 43.04% from the previous quarter. Management said revenue from sale of products grew 18.4% YoY, including volume growth of 2.9%.
Faster cost growth pulled operating margin lower
Expenses grew 19.60% YoY against 19.36% revenue growth and 18.99% QoQ against 17.76% revenue growth, narrowing operating margin by 0.17 percentage points YoY and 0.86 percentage points QoQ. Management said strategic pricing actions helped mitigate cost pressures while maintaining market competitiveness. The tax rate was 0.31 percentage points higher YoY and almost unchanged QoQ, so the quarter's profit growth was not driven by a lower tax rate.
Margin remains above peers after a sequential pullback
Operating margin at 16.21% was 5.55 percentage points above the 10.66% median for 47 Fast Moving Consumer Goods peers that had reported the same quarter. The margin rose from 15.55% in Q4FY26 to 17.07% in Q1FY27 before declining in Q2FY27, making the latest move a reversal of the prior quarter's improvement rather than a third straight decline. Other income accounted for 8.83% of pre-tax profit, which is a meaningful contributor to reported profit quality.
Spices and new initiatives supported the quarter
Management said spices grew 25.1% YoY and that 15 new innovations expanded buying occasions and consumer touchpoints. The company told analysts that Project Bolt is scaling its digital-commerce effort through brand investment and innovation. Management also said spices coverage restructuring is scheduled through March 2027, while Convenience Foods growth was affected by the festive-calendar shift.
No immediate market reaction after the post-close filing
The results were filed after market close, so there is no immediate market reaction to report. Across the four prior result reactions, the stock rose twice and fell twice, with a median absolute move of 1.82%, indicating a mixed and generally contained historical response.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹776 cr | ₹659 cr | +17.76% | +19.36% |
| Other income | ₹11 cr | ₹19 cr | -43.04% | +5.68% |
| Expenses | ₹650 cr | ₹547 cr | +18.99% | +19.60% |
| Operating profit | ₹126 cr | ₹113 cr | +11.80% | +18.13% |
| Operating margin (%) | 16.21% | 17.07% | — | — |
| Interest | ₹2 cr | ₹2 cr | -1.23% | -10.11% |
| Depreciation | ₹13 cr | ₹12 cr | +1.69% | -0.55% |
| Profit before tax | ₹122 cr | ₹117 cr | +4.20% | +19.70% |
| Tax | ₹31 cr | ₹30 cr | +4.07% | +21.18% |
| Net profit | ₹91 cr | ₹88 cr | +4.24% | +19.22% |
| EPS (₹) | ₹6.67 | ₹6.40 | +4.22% | +19.11% |
Operating margin of 16.21% compares with a Fast Moving Consumer Goods sector median of 10.66% across 47 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Revenue from sale of products grew 18.4% year on year, with volume growth of 2.9%.
- Spices grew 25.1% year on year in Q2 FY27.
Guidance & outlook
- Spices coverage restructuring is scheduled through March 2027.
New initiatives
- Project Bolt is scaling digital commerce through brand investments and innovation.
- The company supported growth through 15 new innovations expanding buying occasions and consumer touchpoints.
Competition
- Strategic pricing actions helped mitigate cost pressures while maintaining market competitiveness.
Problems & risks
- Convenience Foods growth was affected by the festive-calendar shift.
- The international business grew despite a volatile geopolitical environment.
What to watch
- Whether operating margin recovers from 16.21% after expenses grew 19.60% YoY against 19.36% revenue growth.
- Whether volume growth improves from 2.9% as spices growth builds on the reported 25.1% YoY increase.
- Progress on the spices coverage restructuring scheduled through March 2027.