JPMorgan has initiated coverage on Orkla India Limited with an overweight rating, signaling a positive outlook for the FMCG company. The investment bank has set a target price of ₹745.00 per share for the stock.

Analyst Rating Details

The overweight rating from JPMorgan indicates that the investment bank expects Orkla India to outperform relative to its sector peers or the broader market. This rating typically suggests that analysts view the stock as an attractive investment opportunity at current price levels.

Investment Implications

An overweight rating generally indicates that JPMorgan's analysts believe Orkla India's stock price has potential for appreciation. The target price of ₹745.00 provides investors with the analyst's view on the stock's fair value based on their fundamental analysis.

The initiation of coverage by a major investment bank like JPMorgan often brings increased attention to a stock and can influence investor sentiment. Such ratings are typically based on comprehensive analysis of the company's financial performance, market position, and growth prospects within the FMCG sector.

Orkla India Limited , a multi-category foods company, has reported robust volume growth of 7.70% in Q2 FY26, despite facing significant deflation in the spices segment. The company's revenue from operations stood at INR 6,503.00 million, marking a 4.90% increase year-over-year.

Key Financial Highlights

• Revenue: INR 6,503.00 million (4.90% YoY growth)
• Volume growth: 7.70% YoY
• EBITDA: INR 1,097.00 million
• EBITDA margin: 16.90%
• PAT: INR 767.00 million
• PAT margin: 11.80%

Segment Performance

Convenience Foods

The convenience foods segment demonstrated strong performance with a 19.20% growth in Q2 FY26. This growth was primarily driven by the sweets category, which saw an impressive 26.40% increase, supported by a robust festive season.

Spices

While the spices segment experienced a volume growth of 5.90%, its value growth remained soft at 0.10% due to continued deflation, particularly in chili prices. The company had to partially pass on the decline in raw material costs to remain competitive, resulting in lower price realization.

Digital Commerce Growth

Orkla India's digital commerce, including e-commerce and quick commerce, grew by 49.00% in Q2 FY26, now contributing to approximately 10.00% of domestic sales. The company noted that quick commerce accounts for about 70.00% of its digital sales.

International Business

The international business, constituting about 20.00% of total revenues, saw growth primarily in the convenience foods category. The Gulf Cooperation Council (GCC) countries, which account for 70.00% of international sales, grew by 14.70%.

Challenges and Strategies

Sanjay Sharma, Managing Director and CEO of Orkla India, highlighted the unprecedented deflation in spice prices, calling it a "black swan event" for the industry. The company has been focusing on driving volume growth and maintaining its premium positioning in blended spices while adjusting prices in pure spices to remain competitive with the unorganized market.

Future Outlook

While not providing specific forward-looking statements, the management expressed optimism about improved consumption environment due to government initiatives and reduced inflation. The company continues to focus on expanding its product range, increasing penetration, and enhancing its presence in core markets.

Orkla India's first earnings call since its November listing demonstrates the company's resilience in navigating challenging market conditions while maintaining strong volume growth and market position in its core segments.

Financial Performance Table

Note: YoY growth for EBITDA and PAT not provided in the available data.