Orkla India Ltd Management Discussions

Economic Overview

Global Economy

The global economy recorded moderate growth in Calendar Year (CY) 25, with GDP expanding by approximately 3.4%, supported by resilient consumer demand and public investment. However, growth remained uneven across regions, with advanced economies slowing to around 1.9% due to elevated interest rates and tighter financial conditions, while emerging markets grew at a stronger pace of about 4.4%, driven by domestic demand and manufacturing activity.

During the year under review, global trade conditions remained volatile, influenced by evolving trade policies and geopolitical tensions. Disruptions in key regions, including West Asia, led to significant operational challenges, such as port closures, extended transit time, and heightened volatility in energy prices, freight rates and commodity markets. These developments exerted pressure on global supply chains and contributed to inflationary trends across economies.

Despite the challenging global environment marked by geopolitical uncertainties and supply chain disruptions, your Company responded proactively through calibrated and timely interventions. We continued to strengthen supply chain resilience to ensure uninterrupted product availability across markets. We also actively managed cost pressures through a balanced approach comprising calibrated price increases, disciplined cost control measures and close collaboration with business partners, enabling continuity of operations and sustained business performance.

Outlook

The global economic outlook remains moderate, with growth projected at around 3.1% in CY26 and 3.2% in CY27, reflecting subdued expansion across major economies. 1

Global growth remains exposed to geopolitical tensions, particularly in West Asia, and evolving trade policies, which could disrupt energy and shipping routes. Such developments may increase commodity and freight costs, create supply chain uncertainties and impact global trade flows and investment sentiment. Your Company remains focused on maintaining operational resilience through proactive risk management, diversified sourcing strategies and strong supply chain planning. We continue to closely monitor developments across key markets while pursuing disciplined cost management, productivity improvement initiatives and strategic collaboration with business partners to mitigate potential disruptions and sustain long-term growth.

Indian Economy

India remained one of the fastest-growing major economies in Financial Year (FY) 26, with real GDP growth estimated at 7.7%, driven by strong domestic demand, sustained public capital expenditure and improving industrial activity. Inflation remained broadly moderate during the year under review, with a slight uptick toward the end due to food prices and energy-related risks linked to geopolitical developments.

Macroeconomic fundamentals remained stable, supported by healthy financial sector conditions, robust tax collections and continued policy support. The Reserve Bank of India (RBI) reduced the repo rate by 100 basis points during the year to support liquidity, credit growth and consumption. Policy measures, including income tax relief, GST rationalisation and labour reforms, continued to support consumption, formalisation and ease of doing business. Against this positive macroeconomic backdrop, your Company continued to focus on strengthening its brands, expanding distribution reach, driving innovation and enhancing operational efficiencies.

Outlook

Indias economic outlook remains resilient, supported by strong domestic fundamentals, continued infrastructure investments and sustained policy support. The RBI projects real GDP growth of around 6.6% for FY27, with domestic demand expected to remain the primary growth driver and private consumption staying healthy.

However, near-term risks include potential El Niño-related disruptions to monsoon patterns, which could impact agricultural output, rural demand and food inflation. Global trade uncertainties and geopolitical developments, particularly in West Asia, may impact India through energy and commodity prices, trade flows and financial conditions.

Despite these risks, Indias strong macroeconomic fundamentals, ongoing infrastructure development and policy reforms are expected to support steady growth and economic resilience. We remain confident in the long-term growth prospects of the Indian market. Your Company is focused on leveraging strong consumer demand through continued investment in its brands, innovation and distribution expansion, while maintaining operational agility to navigate evolving market conditions.

Industry Overview 2

Packaged Food Industry in India

Indias packaged food industry continues to witness strong structural growth, driven by rising urbanization, increasing disposable incomes and a shift towards branded, hygienic and convenience-led food consumption. The market was estimated at approximately INR 10,180 billion in FY24 and is expected to grow at a CAGR of ~11% to reach INR 17,120 billion by FY29.

Growth is being supported by evolving consumer lifestyles, smaller household sizes and increasing female workforce participation, leading to higher demand for ready-to-cook, ready-to-eat and convenience-oriented products. Regional diversity in food preferences continues to drive demand for localized products and flavour innovation, favouring companies with strong regional brand equity.

Channel dynamics are also evolving, with general trade remaining dominant, while modern trade and digital commerce are growing rapidly, improving accessibility and accelerating category adoption. Premiumization, health-conscious consumption and clean-label preferences are further shaping product development across the industry.

Overall, favourable demographics, policy support for food processing and increasing formalization, position the packaged food sector as a strong long-term growth opportunity.

Packaged Spices Industry in India

The Indian packaged spices market is witnessing a structural shift from unorganised loose products to branded offerings, driven by increasing consumer preference for hygiene, quality and convenience. The Indian packaged spices market was valued at approximately INR 345 billion in FY24 and is projected to reach around INR 615 billion by FY29, supported by urbanization, rising incomes and evolving cooking habits.

Demand is further shaped by Indias diverse regional cuisines, with increasing preference for localized blends and authentic flavours. Blended spices are growing faster than pure spices, driven by rising adoption of ready-to-use, dish-specific mixes that offer convenience and consistency.

South India is one of the largest and most mature packaged spices markets in India, accounting for ~35% of the domestic market, with a size of approximately INR 121 billion in FY24 and expected to grow at a CAGR of ~11.7% to reach ~INR 210 billion by FY29.

The market is driven by strong culinary traditions, high per capita spice consumption and a preference for authentic regional flavours, supporting robust demand for blended and localised spice products. Increasing urbanisation and changing lifestyles are accelerating the shift from home-made blends to packaged offerings, favouring organised branded players.

The regions well-developed food ecosystem, proximity to key sourcing regions and high category awareness make it a strong base for distribution-led growth and brand-led consolidation.

Your Company continues to strengthen its leadership in the spices category through distribution expansion, consumer engagement and innovation. Leveraging its deep understanding of regional culinary preferences, your Company continues to enhance its spices portfolio with offerings tailored to evolving consumer needs.

Packaged Spices International Market

India holds a dominant position in the global spices industry as the largest producer, consumer and exporter, accounting for ~70% of global production and ~43% of exports by value. The spices export market was valued at approximately INR 370 billion in FY24 and is expected to grow at a CAGR of ~13.8% to reach ~INR 705 billion by FY29.

Growth is supported by increasing global demand for authentic Indian flavours, expansion of the Indian diaspora and the rising popularity of Indian cuisine. While bulk exports continue to dominate, branded packaged spices are gaining traction across international retail markets.

Key international markets include GCC countries and North America, driven by strong diaspora demand, with additional growth emerging from markets such as the UK, Australia and Southeast Asia. Increasing distribution expansion and demand for convenient, ready-to-use spice formats are further supporting growth in branded exports.

Your Companys brand, Eastern enjoys a leadership position as the No. 1 Indian spice brand in the UAE, supported by strong distribution reach, deep consumer connect among Indian diaspora communities and high brand familiarity. With increasing demand from the Indian diaspora, your Company is well positioned to deepen its presence within this core consumer segment and cater to diverse diaspora cohorts, including traditional households and younger consumers. Alongside the Indian diaspora, the GCC is also home to a significant Arab consumer base, representing an important growth opportunity for the Eastern brand. To deepen our penetration in this segment, we introduced smaller pack sizes suited to traditional trade channels, refreshed our packaging, and executed targeted digital campaigns. These initiatives helped Eastern achieve 4.8% household penetration in Saudi Arabia through the recently established Eastern Arabic range.

Convenience Food Market in India

Indias convenience food market is witnessing strong growth, driven by urbanization, changing lifestyles, increasing female workforce participation and rising demand for time-saving meal solutions. The category includes ready-to-eat (RTE), ready-to-cook (RTC) and frozen food products catering to evolving consumer preferences for convenience, accessibility and taste. The market was valued at approximately INR 79 billion in FY24 and is projected to reach around INR 166 billion by FY29, growing at a CAGR of approximately 16%.

Rising urbanisation, increasing nuclear households, higher disposable incomes, greater participation of women in the workforce and fading culinary skills among millennials and Gen Z is leading to increased adoption of convenience-led food products. Expanding modern trade and digital commerce platforms are improving accessibility and product visibility. Consumers are also showing increasing preference for healthier, premium and region-specific offerings aligned with evolving consumption habits.

Your Company is well positioned to capitalise on the strong growth potential of the convenience foods market through its trusted brands, MTR and Eastern, which have built a strong presence by addressing key consumer needs across Breakfast, Meals and Sweets. Your Company offers a diversified portfolio spanning breakfast mixes and fresh batters, convenient meal solutions that combine ease of preparation with authentic taste and quality, sweet mixes and ready-to-eat sweets. Leveraging its deep South Indian culinary expertise, MTR continues to expand its pan-India presence by bringing authentic regional flavours to consumers across the country, while Eastern caters to the needs of the Malayalee consumers through products that recreate the taste of home. With a strategic focus on expanding its reach across India, particularly in the top 28 metropolitan markets, your Company remains committed to driving growth through innovation, distribution expansion and consumer-centric offerings that deliver both convenience and authenticity.

Government Initiatives

Government initiatives continue to support the growth, formalization and competitiveness of the food processing sector through targeted schemes across production, consumption and infrastructure.

The Production Linked Incentive (PLI) Scheme for Food Processing, with an outlay of approximately INR 109 billion, aims to promote value-added categories such as ready-to-cook (RTC), ready-to-eat (RTE) foods and packaged spices, while strengthening Indias position as a global food manufacturing hub. The scheme incentivises incremental sales and capacity creation.

The PM Formalisation of Micro Food Processing Enterprises (PMFME) Scheme, with an outlay of INR 100 billion, focuses on strengthening micro and unorganised players through financial support, technology upgradation and capacity building, supporting sector formalisation and supply chain efficiency.

The Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), with investments of over INR 60 billion (phased), supports the development of food processing infrastructure through mega food parks, cold chains and agro-processing clusters, improving logistics efficiency and reducing wastage.

In addition, GST rationalization, including rate reductions from 12% and 18% to 5% on packaged and convenience food products, has improved affordability and supported consumption growth, accelerating the shift towards branded and organized offerings, while 100% FDI under the automatic route continues to attract investments and support long-term capacity expansion in the sector.

Company Overview

Your Company is a multi-category food company with a presence across pure spices, blended spices, and convenience food categories. Your Company operates a portfolio of established brands including MTR, Eastern and Rasoi Magic, offering a diverse range of products that cater to every meal occasion, from breakfast and lunch to dinner, snacks, beverages and desserts. The business has built a strong market presence through deep understanding of regional Indian cuisines, extensive distribution reach, sourcing capabilities and product innovation across categories.

Your Company has a significant presence in Southern India, where brands such as MTR and Eastern have strong consumer acceptance and category leadership across key product segments. Your Companys operations are backed by an integrated manufacturing and sourcing network, longstanding supplier partnerships and an expanding presence across general trade, modern trade, digital commerce and export channels.

Business Performance

Spices

Your Companys spices portfolio remained the cornerstone of the business in FY26, accounting for approximately 64.9% of the total Companys revenues. The spices portfolio is anchored by its heritage brands MTR and Eastern, with a strong presence across South India and international markets. Growth in spices was driven by your Companys strategy of continuously expanding its consumer base through deeper household penetration, while increasing consumption through higher usage occasions and frequency. Supported by culturally rooted communication, local language engagement and strong participation in regional celebrations and traditions, MTR and Eastern strengthened their connect with consumers across core markets. This was complemented by impactful campaigns such as MTRs Yakshagana-inspired Puliogare campaign and Easterns Chicken Song and Sambar Wars, as well as participation in iconic regional events including the Nehru Boat Race and Penn Pooram.

Your Company further accelerated growth through consumer-centric innovation tailored to regional tastes and cooking preferences. Eastern expanded its portfolio with products such as Thaninadan Sambar and Superr Kashmiri Chilli, while MTR introduced region-specific offerings including Byadagi Chilli, Masala Karam, Telangana Chilli and Karam Gold Pickle Chilli. In addition, the launch of MTR Prakriti, a premium digital-first single-origin spices brand, enabled your Company to address growing demand for high-quality spice offerings among discerning urban consumers. Together, these initiatives strengthened brand relevance, expanded consumer reach and supported sustained growth across the spices portfolio.

The spices portfolio delivered resilient volume-led growth, driven by expanded distribution, sustained consumer demand and wider household adoption. However, revenue growth remained relatively moderate at 3.0% due to unprecedented deflation in spices, particularly chilli, over the last two years. Your Company passed on input cost reduction to consumers, which resulted in softer revenue growth despite healthy underlying volume growth (tonnage) of 6.4% during FY26. Towards the end of FY26, particularly during the fourth quarter, spice prices witnessed a significant increase. In response, your Company implemented calibrated price increases to partially mitigate the impact of rising input costs while maintaining its competitive position in the market.

INR 16,172.5 Million

Revenue from Spices in FY26

Convenience Foods

The convenience foods category comprises products across key meal occasions, broadly categorised into Breakfast, Meals and Sweets. The portfolio includes a range of ready-to-cook and ready-to-eat offerings catering to evolving consumer preferences, convenience-led consumption patterns and increasing adoption across modern retail and digital channels. Convenience foods accounted for 35.1% of total revenues. The category delivered healthy growth of 11.1% during FY26, led by strong traction in Breakfast, Meals and Sweets segments.

Growth was driven by a combination of strong brand building, consumer-centric innovation, and your Companys focus on expanding household penetration and consumption occasions. MTR drove strong engagement through a series of targeted digital campaigns for its Breakfast Mixes and Fresh Batters portfolio, aimed at metropolitan consumers. Through targeted 360-degree campaign for its Sweets portfolio, MTR strengthened its connect with consumers by celebrating festive and family occasions. MTR further strengthened its portfolio through a steady pipeline of innovations, including fusion variants of its iconic Mysore Pak, launch of Dharwad Peda, and new breakfast offerings such as Schezwan Idli, Butter Gourmet Idli and Coconut Chutney Mix. Responding to evolving consumer preferences, Eastern accelerated the scale-up of its convenience foods portfolio by driving awareness, trials and distribution for its Payasam and 5-Minute Breakfast range.

INR 8,756.5 Million

Revenue from Convenience Food in FY26

Domestic Business Performance

The domestic business delivered healthy volume growth of 5.7%, while revenue growth was 5.2% tempered by deflation in spices, leading to price reductions being passed on to consumers. South India contributed around 69.5% of your Companys total revenues during the year, aided by strong brand equity for MTR and Eastern. The spices portfolio delivered healthy volume-led growth during the year despite softer value growth arising from sharp commodity deflation, particularly in chilli prices.

Growth during the year was led by increasing retail reach, strong execution across general trade and expanding presence across modern trade and digital commerce channels. Your Companys retail reach stood at around 679,000 retail touchpoints during FY26.

79.0%

Revenue contribution from the Domestic business in FY26

International Business Performance

Your Companys International Business contributed a meaningful share of overall revenues during FY26, with international markets accounting for around 21.0% of revenue mix, led primarily by GCC markets. International Business revenues grew by 7.5% during the year, supported by strong brand performance and expanded market reach. During the year under review, your Company strengthened its presence across GCC markets through expanded channel reach, focused consumer engagement initiatives and product offerings tailored to regional preferences, including Arabic masalas and other market-specific variants. Growth in GCC markets was 12.9% during the year.

The North America business faced near-term headwinds due to tariff-related uncertainties, which disrupted the retail environment and led to reduced inventory levels. Underlying consumer demand remains resilient, providing a strong foundation for recovery as external conditions normalize.

21.0%

RevenuecontributionfromtheInternationalbusinessinFY26

Company Outlook

Your Company aims to strengthen its position as a multi-category food Company by building scale across its core categories, driving product innovation, expanding household penetration and increasing relevance across meal occasions. Your Companys growth strategy is anchored around strengthening its presence in core markets, particularly in South India where its brands, MTR and Eastern enjoy strong consumer acceptance, deep distribution reach and high brand recall. The business intends to drive deeper consumer adoption through stronger retail visibility, localised consumer engagement and innovation aligned with regional taste preferences and consumption habits. Alongside strengthening its core portfolio, your Company also aims to increase frequency and value per household through expansion across relevant meal occasions, product formats and convenience-led food offerings, leveraging existing brand trust, sourcing capabilities and manufacturing infrastructure.

Your Company plans to accelerate growth through wider distribution reach across general trade, modern trade, and digital commerce channels, led by route-to-market transformation initiatives and enhanced digital commerce capabilities. Your Company is strategically focused on expanding its footprint across India, with particular emphasis on the top 28 metropolitan markets. Growth will be driven through continuous product innovation and portfolio development, aligned with rising demand for convenience, changing consumer lifestyles, and regional culinary preferences across the core categories of Spices, Breakfast, Meals, and Sweets. The business also intends to strengthen operational efficiency and capital productivity through supply-chain digitisation, inventory optimisation, manufacturing discipline and a hybrid manufacturing model that balances in-house production and outsourcing based on product criticality, quality requirements and capital efficiency considerations.

Internationally, your Company aims to strengthen its presence across key diaspora-led markets through regional product offerings, portfolio expansion and wider distribution reach, while continuing to build its position in the GCC and USA.

Your Company also aims to strengthen its long-term growth platform through selective inorganic opportunities across categories and geographies, leveraging its understanding of regional Indian cuisines, distribution capabilities and integration experience.

With trusted brands, strong operational capabilities and the backing of Orkla ASA, your Company aims to build a scalable and sustainable multi-category food business catering to diverse consumer preferences across India and international markets.

Financial Performance (Consolidated)

Revenue from operations for FY26 stood at INR 25,091.4 million, registering a year-on-year growth of 4.8%. This performance was supported by a volume expansion of 5.9%, the highest in the last four years reflecting a meaningful acceleration in demand and your Companys sustained focus on driving volume-led growth. The improvement in volume growth underscores the effectiveness of your Companys distribution expansion, product portfolio initiatives, and sharper execution in key markets.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the year under review, stood at INR 4,240.9 million, with EBITDA margin of 16.9%, representing an improvement of 30 bps over the previous year. The deflationary environment in spices over the past two years led to pricing adjustments, which impacted your Companys ability to recognize income under the Production Linked Incentive

(PLI) scheme. Consequently, no PLI income was recognized for FY26. On a like-for-like basis, excluding the impact of PLI, EBITDA grew by 12.4%, along with a margin expansion of 100 basis points, reflecting improved underlying operational performance.

Profit before exceptional items and tax stood at INR 3,990.7 million, registering a growth of 2.7%. The growth was moderated by the absence of PLI income during the year, as well as lower financial income, primarily due to reduced cash surplus following dividend payout in the previous financial year.

During the year under review, your Company recorded exceptional items of INR 166.6 million, relating to gratuity expenses following the implementation of the new labour codes.

Net Profit for the year was at INR 2,856.7 million, representing a growth of 11.7%.

The consolidated Financial Highlights for FY26 are as follows

			(In INR million)
Particulars	FY\u201926	FY\u201925	Change
Revenue from operations	25,091.4	23,947.1	4.8%
Operating Profit before interest, tax and depreciation and amortization (EBITDA)^	4,240.9	3,964.4	7.0%
EBITDA%	16.9%	16.6%	30 bps
Operating Profit (EBIT)*	3,699.5	3,347.1	10.5%
EBIT%	14.7%	14.0%	77 bps
Profit before exceptional items and tax	3,990.7	3,886.9	2.7%
Exceptional items (net)	(166.6)	(336.4)	-50.5%
Profit before tax	3,824.1	3,550.5	7.7%
Net profit	2,856.7	2,556.9	11.7%
Net Profit Margin (%)	11.4%	10.7%	71 bps

^EBITDA is calculated as net profit for the year plus finance costs, fair value loss on financial instruments (included under other expenses), exceptional items (net), depreciation & amortization expense and total tax expense minus other income *EBIT is calculated as EBITDA minus Depreciation and Amortization

Key Financial Ratios

Particulars	FY\u201926	FY\u201925	Change
Return on Net Worth (RoNW)%	14.3%	12.6%	168 bps
Debtors Turnover Ratio	14.4	14.2	1.4%
Inventory Turnover Ratio	4.6	4.4	5.5%
Interest Coverage Ratio*	55.2	51.1	7.9%
Current Ratio	2.7	1.9	42.5%
Debt Equity Ratio	0.02	0.02	3.3%
Operating Profit (EBIT) Margin (%)	14.7%	14.0%	77 bps
Net Profit Margin (%)	11.4%	10.7%	71 bps

*Interest Coverage Ratio is calculated as Operating Profit (EBIT) divided by Finance Costs

Remarks

Reason for Major Change (if variation is 25% or more)

Current Ratio: The current ratio improved during the year, mainly due to a decline in current liabilities, led by a reduction in trade payables and payment of statutory dues, including TDS on dividend declared in FY25.

Risks & Opportunities

Your Company operates in a sector that continues to offer significant long-term opportunities, supported by favourable demographics, rising disposable incomes, increasing urbanisation, premiumisation, and the growing importance of modern trade and digital commerce. At the same time, your Company operates in a dynamic and evolving environment, facing risks from commodity price volatility, geopolitical uncertainties, intensifying competition from both large FMCG and regional players, evolving regulatory requirements, rapid channel shifts, and changing consumer preferences.

Your Company remains focused on creating long-term stakeholder value while maintaining an appropriate balance between sustainable growth and resource efficiency. Business risks and opportunities are systematically identified, assessed, and managed on an ongoing basis to enable proactive and informed decision-making. The Risk Management Committee of your Company meets periodically to provide oversight and strategic guidance on the implementation and monitoring of mitigation actions, while ensuring responsiveness to evolving business conditions.

Risks

Economic Conditions

Macroeconomic factors, including inflation and changes in consumer spending patterns, directly affect the business. A slowdown in the Indian economy could result in lower discretionary spending on packaged food products.

Your Company mitigates macroeconomic risks through a coordinated set of strategic levers designed to enhance resilience across economic cycles. It follows a volume-led growth approach focused on preserving and expanding household reach, which helps sustain its consumer base during periods of demand pressure while enabling recovery as conditions improve. Its portfolio architecture, spanning affordable offerings to premium segments, ensures relevance across diverse consumer groups and provides flexibility to adapt to evolving spending patterns. Your Companys expanding presence in digital commerce further strengthens access to consumer segments that are relatively less sensitive to income fluctuations, supporting demand stability. In addition, a disciplined approach to cost management, with a strong emphasis on operational efficiency and prudent resource allocation, reinforces resilience against inflationary pressures.

Geopolitical Uncertainties

An unstable geopolitical environment can create risks by disrupting supply chains, increasing input and logistics costs, and introducing uncertainty through changes in trade policies and regulations. This may affect sourcing, production, and distribution efficiency, potentially impacting customer service levels. Prolonged disruptions could also lead to margin pressures and adversely affect overall business performance.

In response, your Company undertakes continuous evaluation of short-term market volatility as well as long-term socio-economic and political developments to proactively anticipate and adapt to potential disruptions. It maintains buffer stock policies to absorb short-term supply and demand fluctuations, while a diversified vendor base supported by competitive procurement processes ensures cost efficiency and supply continuity.

Commodity Price Volatility

The business is vulnerable to fluctuations in the availability and price of agricultural commodities. Inability to secure high-quality ingredients at predictable costs may compress profit margins.

Your Companys manufacturing footprint, comprising both in-house and outsourced facilities, is strategically located near key demand and sourcing centres, enabling greater agility in responding to dynamic market conditions. It actively monitors and assesses the commercial implications of commodity price movements to enhance working capital efficiency, while maintaining strategic inventory positions including opportunity buying based on robust market intelligence for key raw materials. A diversified supplier base, supported by ongoing enhancements to procurement strategies, further strengthens your Companys ability to manage risks related to price volatility and supply constraints. Additionally, your Companys strong and enduring brand equity, built over decades of consumer trust, provides a critical buffer against input cost inflation by enabling the timely implementation and sustainability of price increases.

Changing Consumer Preference

Inability to anticipate and respond in a timely manner to evolving consumer preferences and market shifts within key categories may lead to weaker growth and erosion of market position.

Your Company adopts a structured and proactive approach to managing risks arising from evolving consumer preferences, anchored in continuous innovation and portfolio diversification. It regularly introduces new products, variants and customized formats aligned with changing consumption patterns and regional taste preferences, while also expanding into adjacent and high-growth segments such as ready-to-eat sweets, convenience-oriented offerings and global cuisine-inspired ranges to sustain relevance across diverse consumer cohorts. In parallel, your Company enhances its consumer insight capabilities by leveraging third-party data analytics, ongoing market research and pilot sampling to validate product acceptance prior to full-scale launches, thereby reducing the risk of misaligned offerings.

Competition

The Indian packaged food industry is highly fragmented and competitive. Your Company faces pressure from both large multinational corporations and local organised and unorganised players, which may influence its market share and pricing power.

Your Company mitigates competitive pressures through the inherent structural and operational strengths of its business. Its brands hold leadership positions in core markets, built and sustained over decades, underpinned by a deep understanding of regional tastes that enables the curation of products with a high degree of specificity in flavour and format, thereby creating a strong and defensible competitive moat. This advantage is further reinforced through disciplined and commercially validated innovation. In addition, your Companys deep distribution network in its core markets, supported by a rapidly expanding digital commerce presence, ensures consistent accessibility of its brands to consumers. Your Company also strengthens its market position through localized brand-building initiatives, including regional campaigns, on-ground activations, influencer partnerships and culturally relevant communication, which enhance consumer connect and sustain brand relevance.

Food Safety and Quality Compliance_

Inadequate adherence to product quality standards and applicable local and global food regulations poses a risk to your Companys operations and reputation. Even isolated quality lapses may erode consumer trust and brand credibility, while non-compliance can result in regulatory actions, financial penalties, and potential disruption or suspension of business activities.

Your Company manages contamination and product quality risks through a robust, multi-layered quality governance framework that extends across both owned and third-party manufacturing facilities. All units adhere strictly to Good Manufacturing Practices (GMP), Good Hygiene Practices (GHP) and Food Safety and Standards Regulations (FSSR), with quality embedded throughout the production process and independently validated through periodic audits. Raw material quality is ensured through a structured supplier qualification and continuous monitoring program, while contract manufacturing partners are held to the same stringent standards and audit protocols as owned facilities, supported by contractual quality obligations and regular site assessments. In parallel, a dedicated regulatory affairs team proactively tracks regulatory developments through official channels and active participation in industry bodies, ensuring your Company remains informed, compliant and responsive to evolving food safety requirements.

Business Ethics and Compliance

Non-compliance with statutory and regulatory requirements, including breaches of ethical standards, may expose your Company to legal and financial penalties, regulatory scrutiny, business disruptions, and reputational damage, while undermining stakeholder trust.

Your Company has established a comprehensive governance and compliance framework to mitigate regulatory and ethical risks, anchored by a formal Anti-Bribery and Anti-Corruption policy supported by mandatory employee training, annual refresher programs and strict adherence to the Code of Conduct from the point of hiring. Ethical standards are continuously reinforced through structured induction programs, periodic communications and organisation-wide awareness initiatives. Compliance management is further strengthened through the use of an automated monitoring tool that maps regulatory requirements to responsible employees and provides timely updates on regulatory changes, complemented by periodic training, oversight by compliance officers and independent verification by auditors. In addition, robust third-party due diligence and supplier onboarding processes are followed, collectively enabling consistent compliance, early risk identification and disciplined operational governance.

Cyber Security

Cyberattacks stemming from vulnerabilities in cybersecurity infrastructure, inadequate security protocols, or human error pose a risk to your Companys operations and data integrity. Such incidents may lead to compromise of sensitive information, operational disruptions, financial losses, and exposure to regulatory actions, litigation, and reputational damage.

Your Company has implemented a comprehensive cybersecurity framework to effectively manage and mitigate cyber risks across its operations. This framework includes regular vulnerability assessments and penetration testing (VAPT), along with continuous monitoring of threats across endpoints and network perimeters to ensure timely identification and remediation of security gaps. Robust access controls such as role-based access, segregation of duties reviews, multi-factor authentication and privileged access monitoring-are enforced to safeguard critical systems. Network and endpoint security are further strengthened through secure remote access protocols, advanced endpoint detection and response tools, and automated patch management. In addition, your Company promotes strong cybersecurity awareness through regular employee training programs, supported by defined software usage policies and structured system controls, thereby enhancing overall resilience and ensuring ongoing compliance with cybersecurity standards.

People

Risks related to people management, including loss of critical talent, gaps in succession planning, and non-adherence to occupational health and safety protocols, may impact organizational capability, leadership continuity, and operational effectiveness. Such challenges could result in workplace incidents, regulatory non-compliance, legal exposure, and reputational damage, ultimately affecting overall business performance.

Your Company has established structured talent management practicestostrengthenorganizationalcapabilityandensurecontinuity, including defined succession planning for critical roles, regular talent reviews, and a strong focus on internal talent development supported by performance management, capability building, and targeted external hiring where required. Compensation benchmarking, talent segmentation, and long-term incentive schemes further support retention and alignment of workforce capabilities with business needs. In parallel, your Company maintains a robust health and safety framework anchored by strong governance through periodic management reviews, safety committees, and leadership oversight, with comprehensive incident reporting, monitoring, and corrective action mechanisms supported by regular audits and compliance checks ensuring timely resolution of safety issues and adherence to established safety standards.

Opportunities

Leverage Formalization and Premiumization of Foods

The ongoing shift from unorganised, loose food consumption to branded packaged products, along with the transition from basic processed foods to value-added offerings, represents a significant growth opportunity for your Company.

Although a substantial portion of the market remains fragmented and dominated by unorganized players, consumer preferences are steadily evolving towards trusted brands that deliver consistent quality, safety, and reliability. This shift is being driven by rapid urbanisation, rising disposable incomes, and increasing awareness of health, hygiene, and food safety.

Your Company is well positioned to capitalise on this transformation, supported by strong regional brand leadership, deep-rooted consumer trust, and robust sourcing and quality assurance capabilities. Your Companys focus on authentic taste profiles, purity, and consistency directly addresses key consumer concerns associated with unorganised offerings.

Additionally, tightening regulatory standards around food safety and quality are expected to disproportionately impact smaller, unorganized players, thereby accelerating formalization and creating a favourable operating environment for compliant and scaled companies such as Orkla India.

Further, a young and increasingly urban population, rising female workforce participation, smaller households, and changing cooking habits are driving demand for convenience-led food solutions. At the same time, a growing willingness to experiment with new cuisines is expanding consumption occasions. These trends are accelerating the adoption of ready-to-cook and ready-to-eat formats, positioning your Company to participate in a fast-growing, yet still underpenetrated, convenience foods segment.

Backed by strong brand equity, an extensive distribution network, stringent quality standards, and robust innovation capabilities, your Company is well positioned to drive category formalisation, enhance its product mix, and capture incremental value as consumers increasingly migrate towards trusted, premium branded offerings.

Deepen Distribution

Deepening distribution remains a key structural opportunity for your Company, with significant headroom to expand both reach and in-market effectiveness. While your Company has established strong positions in its core markets, further growth can be unlocked by widening its distribution footprint into underpenetrated towns and villages, as well as by strengthening last-mile connectivity across rural geographies. In parallel, enhancing outlet productivity through increased assortment, improved shelf visibility, and higher purchase frequency can drive deeper household penetration within existing markets.

Rural India, in particular, offers a meaningful long-term opportunity, supported by low category penetration, improving infrastructure, and rising aspirations for branded, quality-assured products. Success in these markets will depend not only on physical reach, but also on building relevance through appropriate pack-price architectures and locally aligned execution.

Leveraging technology and data analytics to drive sharper outlet targeting, optimise assortment, and enable data-driven decision-making can further enhance distribution efficiency and effectiveness. Backed by its strong brand portfolio and distribution backbone, your Company is well positioned to strengthen its route-to-market, improve availability, and capture incremental growth across both urban and rural markets.

Accelerate Growth in Modern Trade and Digital Commerce

Modern trade and digital commerce are scaling rapidly, unlocking access to new consumers and geographies, particularly in urban markets, and fundamentally transforming how products are discovered, evaluated, and purchased.

The accelerated expansion of these channels presents a powerful opportunity for your Company to fast-track innovation, amplify brand salience, and deepen penetration across high-growth urban and digital platforms. These shifts are also enabling more precise, channel-specific portfolios, driving superior visibility, and creating faster, more agile routes to market.

Expand International Business

International markets present a significant opportunity for your Company, anchored in the large Indian diaspora across the GCC, USA, and other key regions. This segment continues to exhibit strong and growing demand for authentic, trusted Indian flavours, providing a stable and expanding base for your Companys international business.

Your Company is well positioned to deepen its presence within this core consumer segment and catering to diverse diaspora cohorts, including traditional households and younger consumers. In parallel, there is a developing opportunity to selectively engage with local consumers through calibrated portfolio adaptations.

Your Company has the opportunity to scale its value-added foods portfolio across international markets. A calibrated and phased approach to market expansion, supported by continued investment in innovation and market-relevant offerings, is expected to enable your Company to strengthen its international presence and drive sustained growth.

Digital Capabilities and Responsible use of Artificial Intelligence (AI)

Data analytics and artificial intelligence are progressively reshaping how food and consumer goods companies operate-transforming demand forecasting, sourcing and production planning, and consumer engagement. When applied thoughtfully, these capabilities enable more informed decision-making, streamline routine processes, and allow resources to be redirected towards higher-value activities.

At Orkla India, this opportunity is being approached in a calibrated and responsible manner, with strong emphasis on data protection, privacy, and governance. As digital technologies and AI applications continue to evolve, your Company remains committed to adopting them thoughtfully to drive efficiency, agility, and long-term value creation.

Growth Through Strategic Acquisitions

Indias branded food market remains highly fragmented, presenting a compelling opportunity to acquire established regional brands with strong consumer franchises and deep cultural relevance. Your Company is well positioned to capitalise on this opportunity, supported by its strong financial profile, which provides the flexibility to pursue disciplined, value-accretive acquisitions.

YourCompanycanleverageitsprovenacquisitionplaybooktointegrate such brands into its distribution network, sourcing ecosystem, and culinary and consumer insight capabilities. As demonstrated by past acquisitions, this approach enables the realisation of both cost and revenue synergies, strengthens market positions in core categories, and accelerates entry into new geographies and adjacent categories.

This provides a scalable pathway for inorganic growth while reinforcing your Companys presence across regional taste ecosystems and driving long-term value creation.

Human Resources

Guided by our Employee Value Proposition (EVP) - A Home to Grow, we are committed to fostering a workplace where every employee feels valued, empowered and inspired to realise their full potential. Your Companys people strategy is centred on attracting, developing and retaining talent by creating meaningful career opportunities, building future-ready capabilities and enabling a high-performance culture.

Your Company continues to invest in learning and development, leadership capability building and talent management initiatives that equip employees to succeed in a dynamic and evolving business environment. Structured talent development programs such as the Young Professional Development Program (YPDP) and Ascend provide cross-functional exposure and early leadership development opportunities for high-potential talent. Capability-building initiatives including SCALE & Passion, mPower, Elevate and the Winning Leadership Framework focus on enabling business performance and operational excellence, strengthening the culture of values and compliance, promoting health and safety, and developing leadership and managerial capabilities across the organization. Employees also have access to MyLearning, your Companys internal digital learning platform, which supports continuous learning, skill enhancement and self-driven development.

Your Company remains committed to fostering a diverse and inclusive workplace. Women represented 36.1% of the workforce and 22.2% of leadership positions during the year. Through focused Diversity, Equity and Inclusion (DEI) initiatives, inclusive leadership practices and talent development programs, your Company continued to promote equal opportunities and a culture of belonging.

Employee wellbeing remains a key priority. With initiatives such as the MANAS, an Employee Assistance Programme we support the physical, mental and emotional wellbeing of our employees. Policies such as See

Her Empowered (SHE) support the maternity lifecycle, with flexible work arrangements, childcare and transition. Your Companys safety culture continues to be reinforced through structured environment, health and safety training and awareness programs across locations.

Employee engagement and recognition continued to be strengthened through a robust rewards and recognition framework, including programs such as Galaxy of Stars, Spotlight, GEM (Going the Extra Mile), Elite Circle, Long Service Awards and Sales Superstar. These initiatives, together with regular employee engagement activities and celebrations of cultural and regional festivals, help foster a connected workplace and reinforce a culture of collaboration, performance and belonging.

2,207

Number of people employed as of March 31, 2026.

Internal Control System

Your Companys internal financial control framework is commensurate with the size and nature of its business operations and is aligned with applicable regulatory requirements. Your Company has established well-defined policies and procedures to guide its business operations effectively.

The responsibility for ensuring compliance with these policies and procedures rests with the respective unit and functional heads. The adequacy and effectiveness of internal control systems are periodically evaluated by management, Statutory Auditor and Internal Auditor.

Cautionary Statement

In accordance with relevant securities laws and regulations, certain observations within this Management Discussion and Analysis concerning your Companys objectives, plans, or projections are categorised as forward-looking statements. Actual results may differ materially from those expressed or implied in such statements.

Key factors that could influence performance include shifts in domestic and global supply and demand, pricing trends in core markets and heightened competition. Furthermore, revisions to government policies, taxation, or legal statutes, along with various incidental variables, remain significant influences on outcomes.