Shares of Orkla India gained more than 5% after Citigroup initiated coverage on the stock with a buy rating and a target price of ₹750, implying a potential upside of about 35% from current levels.
Citi noted that Orkla India operates in the food and beverages segment, with a focus on spices and convenience foods. The company owns well-known brands such as MTR Foods and Eastern Condiments, and has a strong presence in southern India.
According to the brokerage, the company is a market leader in the spices category in Karnataka and Kerala, while also maintaining a significant presence in Andhra Pradesh and Telangana. The report highlighted that the business could benefit from the ongoing shift toward organised and packaged products in the spices and convenience foods segment.
International markets account for more than 20% of the company’s revenue and are growing faster than the domestic business, Citi said. The brokerage also identified mergers and acquisitions as a potential growth driver for the company.
Citi expects revenue to grow at a compound annual growth rate (CAGR) of about 9% between FY26 and FY28. Earnings growth is also projected to remain steady, with profit after tax expected to expand at roughly 9% CAGR over the same period.
The brokerage estimates that operating margins could improve to around 17.2% by FY28. Margin expansion is expected to be supported by a better product mix, operational efficiencies, adequate manufacturing capacity, and improvements in working capital management.
Citi’s target price of ₹750 is based on a valuation of 30x the company’s estimated December 2027 earnings per share.
However, the report also highlighted certain risks, including volatility in commodity prices, a relatively high dependence on southern Indian markets, and competition from regional players in the spices category.
Orkla India Q3 Results
In its latest quarterly performance, Orkla India reported a 13.98% year-on-year decline in net profit to ₹56.6 crore for Q3 FY26, compared with ₹65.8 crore in the same quarter last year.
Despite the drop in profit, revenue from operations rose 3.4% YoY to ₹636 crore, driven primarily by volume-led growth.
Operational performance remained strong during the quarter. EBITDA increased 19.7% YoY to ₹103.2 crore, up from ₹86.2 crore a year earlier, supported by improved cost management and operating efficiencies.
As a result, EBITDA margin expanded to 16.2% from 14.0% in Q3 FY25, indicating improving profitability despite modest revenue growth.