Financial Performance Highlights

Q2 FY27 Performance:

  • Revenue from operations: ₹776 crores, growing 19.4% YoY
  • Revenue from sale of products: 18.4% YoY growth
  • Volume growth: 2.9% YoY
  • EBITDA: ₹124 crores, growing 12.6% YoY
  • EBITDA margin: 15.9% (moderated by ~100 bps YoY)
  • PAT growth: 19.2% YoY

H1 FY27 Performance:

  • Revenue from operations: ₹1,435 crores, growing 15.1% YoY
  • Volume growth: 2.3% YoY
  • EBITDA margin: 16.6% (reported)
  • PAT before exceptional items: 14.4% growth

Category-wise Performance

Spices:

  • Grew 25.1% YoY in Q2 FY27
  • Significant commodity inflation, particularly in chili and coriander
  • Price increases of approximately 20% implemented
  • Volume growth moderated due to high inflation but remained positive
  • Strong execution during Onam season in Kerala

Convenience Foods:

  • Grew 7.7% YoY in Q2 FY27
  • Growth moderated by shift of festive season (Dussehra/Diwali) to Q3 FY27
  • Sequential quarter-on-quarter growth continued
  • Accelerating digital commerce and innovation driving growth

Geographic Performance

Domestic Business:

  • Grew 20% YoY in Q2 FY27
  • Eastern region leading growth
  • Resilient Indian economy and healthy consumer demand
  • Strong execution focus across portfolio

International Business:

  • Grew 11.7% YoY in Q2 FY27
  • GCC region grew 22.7% despite volatile geopolitical environment

Strategic Initiatives Update

Project Bolt (Digital Commerce Initiative):

  • Final quarter of implementation
  • Focus on building business across top 28 cities in India
  • Increased ANSP investments in consumer reach and demand generation
  • Digital consumer reach tripled through scaled social media content
  • 38 innovations launched in H1 FY27 (23 in Q1, 15 in Q2)
  • Digital commerce contribution to domestic business: 10% in Q2 FY27 (vs 8.9% in Q1 FY27)
  • Digital commerce revenues from Rest of India: 33.6% YoY growth in Q2

Kerala Distribution Restructuring:

  • Objective: Build fit-for-purpose route-to-market across key categories and channels
  • Three priorities: Strengthening convenience foods, improving standalone modern trade position, expanding spice outlet coverage
  • Convenience foods: Sales productivity increased to 1.27x Q4 FY26 levels; effective coverage increased 1.1x
  • Standalone modern trade: Restructuring commenced June 2026; spice volumes grew 16% QoQ in Q2 vs 4% in Q1
  • Spices: Restructuring commenced in northernmost districts (Kasaragod and Kannur); rollout expected through March 2027

Profitability Analysis

Margin Context:

  • Between FY23-FY26: EBITDA margin expanded 250 bps (14.4% to 16.9%)
  • Approximately half from operating efficiencies, half from commodity deflation
  • FY27: Commodity cycle reversed with significant input cost inflation
  • Pricing actions substantially mitigated inflation impact
  • Margin moderation reflects conscious balance between pricing, volume growth, and competitiveness

Underlying EBITDA Performance:

  • Excluding PLI impact: EBITDA growth 6.3%
  • Excluding PLI and Project Bolt investments: Underlying EBITDA growth 11.6%
  • H1 FY27 adjusted EBITDA margin: 17.2% (40 bps moderation YoY)

Innovation and Product Development

  • 38 innovations launched in H1 FY27 addressing emerging consumer needs
  • Focus on younger consumers in top metro cities
  • Gen Z-focused portfolio development through digital commerce

Market and Competitive Position

  • Spices market: 40% organized, 60% unorganized in South India
  • Pricing policy: Pure spices maintain 10% markup over wholesale commodity prices
  • Market leadership dynamics: Leaders take price actions first, followers follow in 21-30 days
  • Shift from unorganized to organized continuing (30-35% to 40% over 5 years)

Channel Strategy

  • Digital commerce gross margins accretive due to higher convenience foods mix
  • Quick commerce (Zepto, Swiggy, Amazon) becoming important growth driver
  • Three focus categories for Rest of India expansion: breakfast (batters), sweets, meals

Future Outlook

  • Focus on delivering better volume growth while balancing pricing and competitiveness
  • Strategic initiatives expected to build progressively through systematic implementation
  • Multi-quarter transformation with benefits building over time

Q&A Highlights

  • Volume growth positive across both spices and convenience foods categories
  • Spice prices stabilized post-crop cycles, with some speculative movements
  • Competition: All players tend to pass on price increases due to cost pressures
  • Kerala distribution transition: Convenience food separation completed June 2026; modern trade 50% completed; spices restructuring just begun
  • MTR Minute Fresh: Wet batter business expanded to Hyderabad after Bangalore success
  • Eastern brand margin improvement strategy: Building convenience foods portfolio, operating efficiency programs, digitalization